What metrics would be appropriate for each scenario, cost profit and profit center? Describe when an...

What metrics would be appropriate for each scenario, cost profit and profit center?

Describe when an activity should be considered a cost center and when it should be considered a profit center.

B) What metrics would be appropriate for each scenario (cost center; profit center)?

Need help with B.

Expert Solution

While choosing the metrics for each scenario, we should take care of the basic reason for which cost centre and profit centre are recognised for. These are:

1. The basic difference is the Cost centre is a department of a company which takes care of the costs whereas the Profit centre is a subunit of a business which is responsible for profits.

2. The cost centre is responsible for cost control and cost reduction whereas the Profit centre is responsible for Maximizing revenues and profits.

3. The area of influence of cost centre is narrow whereas the area of influence of the Profit centre is wide.

4. Type of work in cost centre is simple as it only influences the cost whereas the area of influence of the Profit centre is complex as it takes care of both profits as well as cost.

5. Cost centre does not generate profit in its own whereas the profit centre do.

6. Example of a cost centre is 'Customer service Facility' and profit centre is 'Sales Division'.

ekkarill92 answered 1 year ago

1. Describe a profit center, cost center and an investment center, explaining how each is distinguished...

1. Describe a profit center, cost center and an investment center, explaining how each is distinguished from the other. Provide an example of each type of center in your business, or if your business is not set up in this fashion, construct an example. 2. What is the relationship between contribution margin and responsibility margin? Explain how each of these measurement tools can be used by to make management decisions.

9. What is a cost center? _________________________________ _ What is a Profit center?

9. What is a cost center? _____________________________________________________________________________________ _____________________________________________________________________________________ What is a Profit center? _____________________________________________________________________________________ _____________________________________________________________________________________ What is an investment center? _____________________________________________________________________________________ _____________________________________________________________________________________ What is management by exception: _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ What is a Balance Scorecard? _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________

What is Amazon's cost center, profit center, and investment center? Explain.

Describe the differences among the cost center, profit center, and investment center. Discuss at least two...

Describe the differences among the cost center, profit center, and investment center. Discuss at least two different measures that can be used to evaluate the performance of an investment center.

WEEK 6: RESPONSIBILITY ACCOUNTING What is a cost center? A revenue center? A profit center? An...

WEEK 6: RESPONSIBILITY ACCOUNTING What is a cost center? A revenue center? A profit center? An investment center? Please explain in the context of your own business or industry, if possible.

What is the difference between a cost center and a profit center? Give a complete answer...

What is the difference between a cost center and a profit center? Give a complete answer that demonstrates what critical element distinguishes the profit center from the cost center.

Identify the five conflict management styles and describe when each one would be appropriate.

Describe a cost center, profit center and investment center. Which do you think is the most important to monitor and why?

Describe a cost center, profit center and investment center. Which do you think is the most important to monitor and why? If you were the Chief Executive Officer of a multi-branch or multi-departmental company, your company may have cost centers, profit centers, and investment centers. What kind of reports and data would be most important for you to review and analyze on a daily, weekly, and monthly basis, and why? Which center is the most important to you, from...

Distinguish among a cost center, a profit center, and an investment center. Provide an example of...

Distinguish among a cost center, a profit center, and an investment center. Provide an example of each for a multi-hospital corporation. What are some of the uses that management may make of accounting information about individual responsibility centers of the business?

3. Describe a scenario where the Spearman correlation would be appropriate to use in calculating the...

3. Describe a scenario where the Spearman correlation would be appropriate to use in calculating the strength of the relationship between two variables. Identify the variables and explain the rationale for your answer. What makes this scenario different from the scenario in the previous question?

Question