Chapter 9 discusses how a manager measures, reports, and evaluates performance for various types of responsibility centers. The balanced scorecard is discussed and linked to the management cycle. The calculation of performance measures such as return on investment, residual income, and economic value added are covered. Various approaches to performance reporting by different types of responsibility centers, including flexible budgeting and variable costing, are introduced. The chapter concludes with the importance of linking performance incentives to performance measures.