Lanier Company manufactures expensive watch cases sold as souvenirs. Three of its sales departments are Retail Sales, Wholesale Sales, and Outlet Sales. The Retail Sales Department is a profit center. The Wholesale Sales Department is a cost center. Its managers merely take orders from customers who purchase through the company€™s wholesale catalog. The Outlet Sales Department is an investment center because each manager is given full responsibility for an outlet store location. The manager can hire and discharge employees, purchase, maintain, and sell equipment, and in general is fairly independent of company control.
Mary Gammel is a manager in the Retail Sales Department. Stephen Flott manages the Wholesale Sales Department. Jose Gomez manages the Golden Gate Club outlet store in San Francisco.
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 called to the attention of eachmanager.

Budget Retail Sales Wholesale Sales Outlet Sales S 750,000 400,000 $200,000 Sales Variable costs Cost of goods sold Advertising Sales salaries Printing Travel 150,000 100,000 30,000 15,000 20,000 30,000 25,000 5,000 3,000 5,000 2,000 10,000 20,000 Fixed costs Rent Insurance Depreciation 50,000 5,000 75,000 1,000,000 30,000 2,000 100,000 1,200,000 10,000 1,000 40,000 800,000 Investment in assets Actual Results Retail Sales Wholesale Sales Outlet Sales Sales Variable costs 750,000 400,000 $200,000 Cost of goods sold Advertising Sales salaries Printing Travel 100,000 75,000 10,000 30,000 15,000 20,000 21,000 26,500 5,000 3,000 5,000 Fixed costs Rent Insurance Depreciation 40,000 5,000 80,000 1,000,000 50,000 2,000 90,000 1,200,000 12,300 1,000 56,000 Investment in assets 800,00