Name the four types of responsibility centers and describe the managers’ responsibilities and authority in each.
Answer to relevant QuestionsWhy are profit center managers evaluated on segment margin instead of net operating income?Explain the balanced scorecard approach to performance evaluation. What advantages does this approach have over using only financial measurements?Violet Company has sales of $520,000, net operating income of $310,000, average invested assets of $940,000, and a hurdle rate of 10 percent. Calculate Violet’s return on investment and its residual income.Peppertree Company has two divisions, East and West. Division East manufactures a component that Division West uses. The variable cost to produce this component is $2.00 per unit; full cost is $2.75. The component sells on ...Poseidon Corporation manufactures a variety of gear for water sports. Poseidon has three divisions: Lake, River, and Ocean. Each division is managed as an investment center. During the current year, the Ocean division ...
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