Castle Company manufactures expensive watch cases that are sold as souvenirs. Three of its sales departments are retail sales, wholesale sales, and outlet sales. The retail sales department is a profit centre. The wholesale sales department is a cost centre; its managers merely take orders from customers who purchase through the company's wholesale catalogue. The outlet sales department is an investment centre, because each manager is given full responsibility for an outlet store location. The manager can hire and dismiss employees; purchase, maintain, and sell equipment; and in general is fairly independent of company control.
Sara Sutton is a manager in the retail sales department. Gilbert Kazmierski manages the wholesale sales department. José Lopez man- ages the Club Cartier outlet store in Montreal. The following are the budget responsibility reports for each of the three departments:

Instructions
(a) Determine which of the items should be included in the responsibility report for each of the three managers.
(b) Compare the budgeted measures with the actual results. Decide which results should be brought to the attention of each manager.

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Sales Variable costs $400,000 $200,000 Cost of goods sold Sales salaries Printing 2 Fixed costs 0 5 Depreciation Investment in assets 2 8 Actual Results Wholesale Sales Outlet Sales Retail Sales $ 750,000 Sales Variable costs $ 400,000 $200,000 Cost of goods sold Advertising Sales salaries Printing Travel 195,000 100,000 75,000 10,000 15,000 120,000 30,000 15,000 20,000 20,000 26,250 5,000 3,000 5,000 1,500 Fixed costs Rent Insurance Depreciation 40,000 5,000 80,000 1,000,000 50,000 2,000 90,000 1,200,000 12,000 1,000 60,000 800,000 Investment in assets