Question: I need help evaluating responsibility centers as profit centers and investment centers (L.O. 2) Joey Bauer Corporation has production plants in Sacramento, Dallas, and Seattle.

I need help evaluating responsibility centers as profit centers and investment centers (L.O. 2)

Joey Bauer Corporation has production plants in Sacramento, Dallas, and Seattle. Following is a summary of the results for 2019:

Plant Revenues Expenses Investment Base(gross assets)

Sacramento $450,000 $225,000 $4,500,000

Dallas $450,000 $180,000 $3,375,000

Seattle $675,000 $247,500 $7,200,000

a. If the plants are treated as profit centers, which plant manager appears to have done the best job?

b. If the plants are treated as investment centers, which plant manager appears to have done the best job? (Assume the plant managers are evaluated by return on investment on gross assets.)

c. Do the results of profit center analysis and investment center analysis give different findings? If so, why?

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