Question

In: Accounting

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.

Solutions

Expert Solution

1. Cost division : - a cost division is a department in the business in which the cost of the business can be allocated and it may not be directly related to the company or business. The cost center only contribute indirectly to the profits of the company.

2. Revenue division : - a revenue division is like a operating unit of a business which contributes to the sales of the company or business. For example, department center each department such as cosmetic, jewellery contributes to the sales of the business thus leading to revenue.

3. Profit division : - it is a division or a branch of the company which contributes for the calculation of the profit. A profit division is responsible for its own profit generation as the manager has the decision making power.

4. Investment division : - it is an unit which is used to measure against its use of capital as opposite of cost or profit division which is measured against the raw materials or profit generating decisions.


Related Solutions

Class: ACCT-301 WEEK 6: RESPONSIBILITY ACCOUNTING What is an investment center? What are the managers of...
Class: ACCT-301 WEEK 6: RESPONSIBILITY ACCOUNTING What is an investment center? What are the managers of an investment center responsible for?
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.
What is Amazon's cost center, profit center, and investment center? Explain.
1.How can/should responsibility center managers use accounting information developed from the variance analysis,standard costs,cost volume profit...
1.How can/should responsibility center managers use accounting information developed from the variance analysis,standard costs,cost volume profit analysis,and efficiency be utilized to make better decisions
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.
7. Which of the following is not a type of responsibility center? A concentrated cost center...
7. Which of the following is not a type of responsibility center? A. concentrated cost center B. Investment center C. profit center D. cost center 8. A responsibility center in which managers are held accountable for both revenues and expenses is called a _______ A. discretionary cost center B. revenue center C. cost center D. profit center 9. The amount of income a given division is expected to earn in excess of a firm's minimum return goal is called: A. return on investment B. residual...
What is the relationship of accountability, responsibility, and authority with respect to a responsibility center
What is the relationship of accountability, responsibility, and authority with respect to a responsibility center
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?
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.
What is meant by classifying a unit as an “investment center” vs. a “cost” or “profit”...
What is meant by classifying a unit as an “investment center” vs. a “cost” or “profit” center? Discuss how each of the following tools, individually and/or collectively, can and should be used to evaluate managers of such “investment center” individual divisions of a large organization: ROI, EVA, and the Balanced Scorecard. (Hint: discuss how each works, what each helps ensure, what dysfunctional behaviors can result from its use, and how multiple approaches can help ensure behavior that aligns individual incentives...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT