Principles of Accounting Volume 2
19th Edition
ISBN: 9781947172609
Author: OpenStax
Publisher: OpenStax College
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Textbook Question
Chapter 12, Problem 3EA
Identify 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 Kohl’s store in Mount Pleasant, Michigan
F. The Hershey Company
G. Procter and Gamble
H. the shoe department in the Kohl’s store in Mount Pleasant, Michigan
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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.
For each office or business segment, indicate which type of Responsibility Center it is:
a. A retail location, such as the Apple Store
b. A manufacturing division that manages its own facilities and production equipment
c. Call center for a warranty claims processing
d. Consulting department of an accounting firm
e. Quality control department for a golf ball manufacturer
PreviousNext
Which 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
Chapter 12 Solutions
Principles of Accounting Volume 2
Ch. 12 - Components of the organization that are...Ch. 12 - When managerial accountants design an evaluation...Ch. 12 - Goal congruence in well-designed performance...Ch. 12 - Responsibility accounting holds managers...Ch. 12 - Performance measures are only useful if _______....Ch. 12 - Which of the following is not a characteristic of...Ch. 12 - A good performance measurement system will align...Ch. 12 - What should an organization do if performance...Ch. 12 - A good performance measurement system will include...Ch. 12 - Without proper performance measures, goal...
Ch. 12 - Dixon Construction Materials has collected this...Ch. 12 - The cost of equity is _______. A. the interest...Ch. 12 - Which of the following measures the profitability...Ch. 12 - The capital structure of Ridley Enterprises Is:...Ch. 12 - Calculate the ROI for Gardner Chemical given the...Ch. 12 - Which of the following statements is false? A. The...Ch. 12 - The metrics based on nonfinancial information are...Ch. 12 - The metrics based on financial numbers produced by...Ch. 12 - People affected by decisions made by a company,...Ch. 12 - The owners of company stock are ______. A....Ch. 12 - Why might a manager focused solely on accounting...Ch. 12 - Is there a way to prevent managers from focusing...Ch. 12 - Should an organization focus on controllable or...Ch. 12 - What are the components of a strategic plan? Find...Ch. 12 - What are the four types of centers and their...Ch. 12 - What would be wrong with using two points of data...Ch. 12 - Compare and contrast short- and long-term goals...Ch. 12 - Can a short-term goal also be a long-term goal?...Ch. 12 - What does goal congruence mean? Provide an example...Ch. 12 - What are the six characteristics of a good...Ch. 12 - What is EVA and why is it superior to other...Ch. 12 - What are the drawbacks to ROI? Give examples of...Ch. 12 - Describe the history and purpose of the balanced...Ch. 12 - What are the characteristics of successful...Ch. 12 - For the following situations, identify whether the...Ch. 12 - For the following descriptions state whether the...Ch. 12 - Identify the type of responsibility center...Ch. 12 - Sara has just taken a job as the middle school...Ch. 12 - During the current year, Sokowski Manufacturing...Ch. 12 - During the current year, Sokowski Manufacturing...Ch. 12 - Assume Skyler Industries has debt of $4,500,000...Ch. 12 - Why do managers want a high ROI, and how would...Ch. 12 - Classify each of the following performance...Ch. 12 - For the following situations identify whether the...Ch. 12 - For the following descriptions, state whether the...Ch. 12 - Identify the type of responsibility center...Ch. 12 - Padma completed her doctoral degree and has taken...Ch. 12 - During the current year. Plainfield Manufacturing...Ch. 12 - During the current year, Plainfield Manufacturing...Ch. 12 - Assume Plainfield Manufacturing has debt of...Ch. 12 - Though a high ROI is desired, what are some...Ch. 12 - Classify each of the following performance...Ch. 12 - Match each of the following with its appropriate...Ch. 12 - Florentino Allers is the production manager of...Ch. 12 - Macon Mills is a division of Bolin Products. Inc....Ch. 12 - Jefferson Memorial Hospital is an investment...Ch. 12 - Crawfords Books and Things has a traditional...Ch. 12 - Coral Creations has strategic plans that call for...Ch. 12 - Match each of the following with its appropriate...Ch. 12 - Oleg Markov is the production manager of NASA...Ch. 12 - Evaluate the two departments for Moxie Products....Ch. 12 - Banyan Industries has two divisions, a tax rate of...Ch. 12 - Forty years ago, Vinfen was founded as a nonprofit...Ch. 12 - What combination of quantitative factors and...Ch. 12 - Josh OShea is the manager of the...Ch. 12 - Kanye Achebe just became the operations manager of...Ch. 12 - Which of the performance measures—ROI, RI, or...
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- Identify the type of responsibility center (revenue center, cost center, profit center, or investment center) for each of the following situations. the legal department for Avon Manufacturing. Cost center the Macy’s store in Mansfield, Ohio Investment center the food and beverage division of the Best Western the marketing department of the Hershey Company the Walmart #5030 on Central Avenue in Toledo, Ohio Apple’s Braeburn Capital Inc., where most of Apple’s billions of dollars are invested Zappo’s department store the men’s clothing department in the Walmart #5030 in Toledo, Ohioarrow_forwardIn each of the following situations, identify which type of responsibility center is appropriate based on the decision-making authority the manager would possess: 1. The manager of the accounting department in Ford’s corporate office. 2. The sales manager of a Ford dealership. 3. The general manager of a Ford dealership. 4. The manager of Ford’s corporate division. 5. The production manager in a Ford plant. options: Cost Center Investment Center Profit Center Revenue Centerarrow_forwardAssume 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.arrow_forward
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