1. Which of the following is a reason for decentralization? It makes it easy to gather...
1. Which of the following is a reason for decentralization?
- It makes it easy to gather and use local information more effectively.
- It helps top management to make proper decisions as top management generates all information.
- It protects segments of a company from competitive pressures.
- It segregates functions, where top management makes all decisions and local unit generates all information.
2. A profit center is a responsibility center in which a manager is responsible for:
- only revenues.
- only investments.
- investments and costs.
- revenues and costs.
3. Which of the following represents the greatest degree of decentralization?
- Profit centers
- Revenue centers
- Cost centers
- Investment centers
Homework Answers
1) a. It makes it easy to gather and use local information more effectively.
2) d. revenues and costs.
Managers are responsible for sales and expenses.
3) d. Investment centers
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1.
Which of the following is a reason for decentralization?
It makes it easy to gather...
12. Which of the following is true of decentralization? a.It protects segments of a company from...
12. Which of the following is true of decentralization? a.It protects segments of a company from competitive pressures. b.Under decentralization, lower-level managers are responsible only for implementing decisions. c.Decentralization allows higher management to make better decisions by using local information. d.It is usually achieved by creating units called divisions. e.Decentralization allows only the CEO of a company to make all important decisions.
Identify which of the following statements about cost centers and decentralization is true. Group of answer...
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.
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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.
2. Which of the following does not describe a management control system? establishes a company’s strategic...
2. Which of the following does not describe a management control system? establishes a company’s strategic goals implements a company’s strategic goals monitors a company’s strategic goals a system that only measures profitability 4. A key advantage of a decentralized organization is ________. increased administrative costs quicker decisions and response time the ease of aligning segment and company goals duplication of efforts 6. Segments are uniquely identifiable components of the business and can be categorized by all of the following...
Which of the following is correct regarding responsibility centers? A. Traceable costs, as used in a...
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...
18. Responsibility Centers. Petroleum Products, Inc., operates primarily in the United States and has several segments: 1. Accounting and finance: responsible for recording financial information and...
18. Responsibility Centers. Petroleum Products, Inc., operates primarily in the United States and has several segments: 1. Accounting and finance: responsible for recording financial information and preparing financial reports. 2. Human resources: responsible for hiring employees and maintaining personnel records 3. Retail stores: responsible for sales prices and all costs within each store. 4. Advertising: responsible for promotional materials 5. Production: responsible for manufacturing company products. 6. International operations: acts as an independent segment responsible for all facets of the...
QUESTIONS If decisions within a company are made by top management at headquarters, which of the...
QUESTIONS If decisions within a company are made by top management at headquarters, which of the following terms best describes this company? a. cost center. b. decentralized organization. c. centralized organization. d. investment center. QUESTION 6 An organizational segment that is responsible for costs and revenues is known as: O a. a financing center. a profit center b. Oc. a cost center Od. an investment center. QUESTION 7 A management control system is an integrated set of techniques for gathering...
Required information [The following information applies to the questions displayed below.] Dalton Co. follows a policy...
Required information [The following information applies to the questions displayed below.] Dalton Co. follows a policy of allocating all common costs equally among its profit centers. A partial responsibility income statement for a typical month is shown below: Responsibility margins Common fixed costs Income from operations Profit Profit Profit Dalton Co. Center 1 Center 2 Center 3 $176,000 $72,000 $62,000 $ 42,000 $ 143,400 $ 47,800 $ 47,800 $ 47,800 $ 32,600 $ 24,200 $14,200 $ (5,800) After evaluating these...
UUTINI ate.. QUESTION 16 A responsibility center in which the authority over and responsibility for costs...
UUTINI ate.. QUESTION 16 A responsibility center in which the authority over and responsibility for costs and revenues is vested in the department manager is termed a profit center. True False QUESTION 17 The minimum amount of desired divisional income from operations is set by top management by establishing a minimum rate of return considered acceptable for invested assets. True False QUESTION 18 Service department charges are similar to the expenses of a profit center that purchased services from a...
1. Organization Structure and Design: Skill-Building Exercise Exercise Overview Diagnostic skills enable a manager to visualize...
1. Organization Structure and Design: Skill-Building Exercise Exercise Overview Diagnostic skills enable a manager to visualize the most appropriate response to a situation. Communication skills refer to the manager’s abilities to both effectively convey ideas and information to others and effectively receive ideas and information from others. In this exercise, you’re asked to apply your diagnostic skills to the question of centralization versus decentralization in an organization. You are also asked about communication issues as they relate to the decision...
18. Responsibility Centers. Petroleum Products, Inc., operates primarily in the United States and has several segments: 1. Accounting and finance: responsible for recording financial information and preparing financial reports. 2. Human resources: responsible for hiring employees and maintaining personnel records 3. Retail stores: responsible for sales prices and all costs within each store. 4. Advertising: responsible for promotional materials 5. Production: responsible for manufacturing company products. 6. International operations: acts as an independent segment responsible for all facets of the...
QUESTIONS If decisions within a company are made by top management at headquarters, which of the following terms best describes this company? a. cost center. b. decentralized organization. c. centralized organization. d. investment center. QUESTION 6 An organizational segment that is responsible for costs and revenues is known as: O a. a financing center. a profit center b. Oc. a cost center Od. an investment center. QUESTION 7 A management control system is an integrated set of techniques for gathering...
Required information [The following information applies to the questions displayed below.] Dalton Co. follows a policy of allocating all common costs equally among its profit centers. A partial responsibility income statement for a typical month is shown below: Responsibility margins Common fixed costs Income from operations Profit Profit Profit Dalton Co. Center 1 Center 2 Center 3 $176,000 $72,000 $62,000 $ 42,000 $ 143,400 $ 47,800 $ 47,800 $ 47,800 $ 32,600 $ 24,200 $14,200 $ (5,800) After evaluating these...
UUTINI ate.. QUESTION 16 A responsibility center in which the authority over and responsibility for costs and revenues is vested in the department manager is termed a profit center. True False QUESTION 17 The minimum amount of desired divisional income from operations is set by top management by establishing a minimum rate of return considered acceptable for invested assets. True False QUESTION 18 Service department charges are similar to the expenses of a profit center that purchased services from a...
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