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Broadening Your Perspective 10-2 (Essay) 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 Budget Retail Sales Wholesale Sales Outlet Sales Sales $750,000 $400,000 $200,000 Variable costs Cost of goods sold Advertising Sales salaries Printing 150,000 100,000 75,000 10,000 20,000 100,000 30,000 15,000 20,000 30,000 25,000 5,000 3,000 5,000 2,000 ravel 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 Broadening Your Perspective 10-2 (Essay) 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 Budget Retail Sales Wholesale Sales Outlet Sales Sales $750,000 $400,000 $200,000 Variable costs Cost of goods sold Advertising Sales salaries Printing 150,000 100,000 75,000 10,000 20,000 100,000 30,000 15,000 20,000 30,000 25,000 5,000 3,000 5,000 2,000 ravel 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