Transfer prices may be used when decentralized units are organized as cost, profit, or investment centers....
Identify which of the following statements about cost centers and decentralization is true. Group of answer choices Accountability for revenues and expenses exist independently of the ability to make decisions. Decentralized organizations are organized into profit centers. Cost centers are centralized, but profit centers are decentralized. Accountability for revenues and expenses requires the ability to make decisions.
Which responsibility centers generate both revenues and costs? Question 20 options: Investment and profit centers Profit and cost centers Cost and investment centers Only profit centers A profit center is Question 21 options: a responsibility center that always reports a profit. a responsibility center that incurs costs and generates revenues. evaluated by the rate of return earned on the investment allocated to the center. referred to as a loss center when operations do not meet the company's objectives.
29.
Which of the following is true of hybrid transfer prices? A. The cost used in hybrid transfer prices is always the actual cost. B. They are less popular in manufacturing industry. C. They take into account both cost and market information. D. The cost used in hybrid transfer prices is always the budgeted cost.
A major software company has established customer service
centers in India, Ireland, and Israel to provide support to its
U.S. customers with foreign operations. The prices that the company
charges for software reflect estimated costs in operating the
centers (i.e., there is no separate charge for service).
How should these centers be organized: as cost centers, profit
centers, or investment centers?
Customer service centers should be organized as
cost
centersprofit centersinvestment centers
.
Materials management can be organized as either a cost center or a profit center. True False Culturally, materials management is similar to housekeeping and maintenance. True False
Decentralization divides company operations into various reporting units. Most decentralized subunits can be described as one of four different types of responsibility centers. Requirements 1. Explain why companies decentralize. Describe some typical methods of decentralization. 2. List the four most common types of responsibility centers, and describe their responsibilities. Requirement 1. Explain why companies decentralize. Describe some typical methods of decentralization. Companies usually decentralize when they to manage the entire organization's daily operations. Decentralization is often based on: become too...
QUESTION 29 A company is analyzing the performance of responsibility centers. Controllable costs would be included in the performance reports of which of the following types of responsibility centers? Profit Centers No Yes Yes No Investment centers No A) B) C) D) Yes Yes A) ОВ) o C) o D) QUESTION 30 Profit center managers are often evaluated using return on investment (ROl) or residual income measures. O True False QUESTION 31 An opportunity cost is the potential benefit that...
Assignment Details The decision-making authority assigned to managers within the different responsibility centers (cost, profit and investment) will differ based on the type of center because the role of management’s responsibilities also differs. Therefore, the accounting information required for planning, control, and performance evaluation differs according to the nature of these responsibilities. In 400-600 words address the following: Distinguish among a cost center, a profit center, and an investment center. Provide an example of each for a multi-hospital corporation. What...
Which of the following is correct regarding responsibility centers? A. Traceable costs, as used in a responsibility accounting system, only consists of variable costs. B. Common fixed costs should be allocated to a segment and used to evaluate the segment’s performance. C. Cost centers, profit centers, and investment centers are all considered responsibility centers. D. Responsibility centers are primarily utilized in companies with centralized operations. E. If a manager is held responsible for generating revenue, controlling costs, and efficiently investing...
The Greco Company is decentralized, and divisions are considered investment centers. Greco has one division that manufactures oak dining room chairs with upholstered seat cushions. The Chair Division cuts, assembles, and finishes the oak chairs and then purchases and attaches the seat cushions. The Chair Division currently purchases the cushions for $25 from an outside vendor. The Cushion Division manufactures upholstered seat cushions that are sold to customers outside the company. The Chair Division currently sells 1,600 chairs per quarter,...