Identify and describe the five different responsibility centers, and provide one example of each


Cost Center: A responsibility center whose manager is accountable only for controllable costs that have well-defined relationships between the center's resources and products or services. Example: Ford Motor Company's Detroit assembly line

Discretionary Cost Center: A responsibility center whose manager is accountable for costs only and in which the relationship between resources and products or services produced is not well defined. Example: The Human Resources Department of Merck & Co.

Revenue Center: A responsibility center whose manager is accountable primarily for revenue and whose success is based on its ability to generate revenue. Example: Avis Car Rental's national reservation center

Profit Center: A responsibility center whose manager is accountable for both revenues and costs and for the resulting operating income. Example: The local Wal-Mart store

Investment Center: A responsibility center whose manager is accountable for profit generation and who can also make significant decisions about the resources the center uses. Example: The president of General Motors (The "company" is the investment center, and the president is the "manager.".)

Business

You might also like to view...

A draft is a paper that never changes

Indicate whether the statement is true or false

Business

What is the primary barrier to applying the principles of the inclusive work place to international collaborations?

a. Greed b. Resources c. Commitment d. Community involvement

Business

If a company wants to utilize data analytics in order to identify those traits that make a prospective customer more likely to purchase, it would use an application known as ________ ________.

Fill in the blank(s) with the appropriate word(s).

Business

Bungert Inc. reported the following results from last year's operations:   Sales$15,200,000Variable expenses 9,470,000Contribution margin 5,730,000Fixed expenses 4,818,000Net operating income$  912,000The company's minimum required rate of return is 12% and its average operating assets were $8,000,000. Last year's residual income was closest to:

A. ($48,000) B. ($972,800) C. $992,000 D. $912,000

Business