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Fill in the blanks with the phrase that best completes the sentence.Some phrases may be used more than once and some not at all.

Phrases:

  • cost center
  • revenue center
  • investment center
  • lower
  • profit center
  • higher
  • responsibility center

1. The maintenance department at the local zoo is a(n)___________

2. The gift shop at the local zoo is a(n)____________

3. The menswear department of a department store, which is responsible forbuying and selling merchandise, is a(n)_______________

4. The production line at a manufacturing plant is a(n)

5. A( n)________________is any segment of the business whose manager isaccountable for specific activities.

6. A division of a beverage manufacturing company responsible for aparticular brand of soft drink is a(n)_______________

7. The sales manager in charge of a shoe company’s northwest sales territoryoversees a(n)

8. Managers of cost and revenue centers are at_____________ levels of theorganization than are managers of profit and investment centers.______

Short Answer

Expert verified

Answer

1) Cost center

2) Profit center

3) Profit center

4) Cost center

5) Responsibility center

6) Investment center

7) Revenue center

8) Lower

Step by step solution

01

Meaning of Cost center

Cost centers are divisions that give capacities inside a firm that are alluded to as benefit units or commerce centers but do not produce income. They are regulatory, bolster, and service-related services since they are fundamental to ensuring that operations work as quickly as conceivable, it is troublesome to nullify specific firm capacities to save cash.

02

Filling in the blanks

1. The maintenance department at the local zoo is a (n) cost center.

2. The gift shop at the local zoo is a (n) profit center.

3. The menswear department of a department store, which is responsible for buyingand selling merchandise, is a (n) profit center

4. The production line at a manufacturing plant is a (n) cost center

5. A (n) responsibility center is any segment of the business whose manager isaccountable for specific activities.

6. A division of a beverage manufacturing company responsible for a particular

brand of soft drink is a (n) investment enter.

7. The sales manager in charge of a shoe company’s northwest sales territoryoversees a (n) revenue center.

8. Managers of cost and revenue centers are at lower levels of the organizationthan are managers of profit and investment centers.

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Most popular questions from this chapter

Question:The accountant for a subunit of Speed Sports Company went on vacation before completing the subunit’s monthly responsibility report. This is as far as she got:

Speed—Subunit X Revenue by Product Actual Results Flexible Budget Variance Flexible Budget Sales Volume Variance Static Budget

Downhill-RI \( 321,000 (a) (b) \) 17,000 F \( 295,000

Downhill-RII 151,000 (c) \) 161,000 (d) 145,000

Cross-EXI 285,000 \( 3,000 U 288,000 (e) 303,000

Cross-EXII 259,000 (f) 255,000 16,500 U 271,500

Snow-LXI 425,000 2,000 F (g) (h) 404,000

Total \) 1,441,000 (i) (j) (k) \( 1,418,500

Requirements

1. Complete the responsibility report for this subunit.

2. Based on the data presented, what type of responsibility center is this subunit?

3. Which items should be investigated if part of management’s decision criteria is to investigate all variances exceeding \)12,000?

Explain the difference between a lag indicator and a lead indicator.

One subunit of Harris Sports Company had the following financial results last month:

Harris—Subunit X Actual Results Flexible Budget Flexible Budget Variance (F or U) % Variance (F or U)

Direct Materials \( 28,000 \) 25,900

Direct Labor 13,000 13,800

Indirect Labor 26,400 23,100

Utilities 12,300 11,300

Depreciation 25,000 25,000

Repairs and Maintenance 4,600 5,600

Total \( 109,300 \) 104,700

Requirements

1. Complete the performance evaluation report for this subunit. Enter the variance percent as a percentage of the budgeted amount rounded to two decimal places.

2. Based on the data presented, what type of responsibility center is this subunit?

3. Which items should be investigated if part of management’s decision criteria is to investigate all variances exceeding $2,500 or 10%?

4. Should only unfavorable variances be investigated? Explain.

What is goal congruence?

What is the biggest disadvantage of using ROI to evaluate investment centers?

See all solutions

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