Chapter 9, Problem 1EB

Assume you have been hired by Cabela’s 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 Cabela’s 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.