Which of the following would most appropriately be evaluated as a “profit center”? Group of answer choices a)Maintenance operations for American Airlines b)A warehouse operation for Amazon c)A hotel restaurant that caters to both hotel guests and non-guests d)Sales division for a large publisher
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- Assume you have been hired by Hilton Hotels and Resorts. As part of your new role in the accounting department, you have been tasked to set up a responsibility accounting structure for the company. As your first task, your supervisor has asked you to give an example of a cost center, profit center, and an investment center within the Hilton organization. Your supervisor is a little unsure of the difference between a profit center and investment center and would like you to explain the difference.For the following situations, identify whether the description is probably a centralized or decentralized organization. A. Seaside Furniture, a small builder of side tables managed solely by its sole proprietor B. Harbor Marketing, which wants Advertising Team Leaders to be able to respond quickly to needs of potential clients so Team Leaders have the authority to make decisions about advertising and pricing C. Coutures Creations, with a single owner who manages the production, accounting, engineering, sales, and other administrative functions D. British Navy E. McDonalds franchise #3101 in Canton. Ohio F. United States ArmyWhich of the following statements is true? I. A packaging department is most likely a cost center. II. In a profit center, the manager is most likely in-charge of investments, revenues and costs. III. The cafeteria in the college is most likely a profit center. IV. A business unit within a business is an example of a revenue center a. All but II b. I only c. All statements are true d. All but II and III e. I and II only Clear my choice
- Identify the type of responsibility center (revenue center, cost center, profit center, or investment center) for each of the following situations. A. the legal department for Avon Manufacturing B. the Macys store in Mansfield, Ohio C. the food and beverage division of the Best Western D. the marketing department of the Hershey Company E. the Walmart #5030 on Central Avenue in Toledo, Ohio F. Apples Braeburn Capital Inc., where most of Apples billions of dollars are invested G. Zappos department store H. the mens clothing department in the Walmart #5030 in Toledo, OhioIdentify the type of responsibility center (revenue center, cost center, profit center, or investment center) for each of the following situations. A. the accounting department for Tubelite Inc. B. the Best Buy in Traverse City, Michigan C. the reservation department of Allegiant airlines D. the sales department of Four Winns E. the Kohls store in Mount Pleasant, Michigan F. The Hershey Company G. Procter and Gamble H. the shoe department in the Kohls store in Mount Pleasant, MichiganAssume you have been hired by Cabelas Sporting Goods. As part of your new role in the accounting department, you have been tasked to set up a responsibility accounting structure for the company. As your first task, your supervisor has asked you to give an example of a cost center, profit center, and an investment center within the Cabelas organization. Your supervisor is a little unsure of the difference between a profit center and investment center and would like you to explain the difference.
- Instructions: Designate the best answer for each of the following questions. 1.Which of the following is a responsibility center that incurs expenses, generates revenues, and is responsible for generating a return on assets? a. Cost center b. Revenue center c. Profit center d. Investment center 2.Which one of the following is the most useful measure for evaluating a manager's performance in controlling revenues and costs in a profit center? a. Contribution margin b. Contribution net income c. Contribution gross profit d. Controllable margin 3.Hanover Corporation desires to earn target net income of $42,000. The selling price per unit is $18, unit variable cost is $5.60, and total fixed costs are $123,912. How many units must the company sell to earn its target net income? a. 13,380 b. 9,993 c. 3,387 d. 9,217 4.Remark…1. Responsibility Centers Indicate how each of the business situations below is most likely to be organized: cost center (CC), revenue center (RC), profit center (PC), or investment center (IC) A. The assembly department of Toyota Motors Corporation. B. The Ayala Mall car park ticket outlets. C. The Magnolia product division of San Miguel Corporation. D. The accounting department of SM Malls. E. The Project 8 branch of Starbucks Coffee. F. The College of Accountancy of the España University. G. The parts department of Suzuki Motors Corporation. H. The convenience store (Mini-Stop) that is owned by a chain organization; the head office supplies all the goods to be sold and determines the selling prices.Return on Investment (ROI) and Residual Income Relations A family friend has asked your help in analyzing the operations of three anonymous companies operating in the same service sector industry. Supply the missing data in the table below:
- As manager of department B in MarIeys Manufacturing, based on the costs you identified in the previous exercise for further research, how does this impact the financial performance of your department, and what might be some questions you want to ask or solutions you might propose to Marleys management?For each of the following managers, describe how managerial accounting could be used to satisfy strategic or operational objectives: a. The vice president of the Information Systems Division of a bank. b. A hospital administrator. c. The chief executive officer of a food company. The food company is divided into three divisions: Nonalcoholic Beverages, Snack Foods, and Fast-Food Restaurants. d. The manager of the local campus copy shop.The Cadillac division of General Motors is considered: a) a cost center b) a profit center c) an investment center d) a center that will be evaluated on profit margin