DOF Responsibility Center

What is a Responsibility Center?

• An organizational segment in which a manager is held accountable only for revenues

• A unit of the organization led by a manager responsible for its activities

• An organizational segment in which a manager is accountable for profits and the invested capital used by the segment

• A segment of an organization for which a particular executive is responsible

Which is not a type of Responsibility Center?

• Income Center

• Investment Center

• Cost Center

• Profit Center

• Deduction Center

What is the main focus of a Revenue Center?

• Controlling expenses

• Generating revenues

• Managing investments

• Improving customer experience

What is the primary task of a Cost Center administrator?

• Developing specific skillsets of employees

• Controlling selling price and sales volume

• Evaluating the financial performance of the center

• Deciding the magnitude of the work to be done

What is the goal of an Investment Center?

• To evaluate the investments made by the responsibility center managers

• To generate profits for the organization

• To control only controllable expenses

• To focus on revenues and expenses

What is the main advantage of Profit Centers?

• Decrease daily decisions for directors

• Decrease operational decision speed

• Increased awareness towards profits

• Decrease performance measure expansion

What is the main disadvantage of Profit Centers?

• May create competition between units

• May increase friction

• May increase awareness towards profits

• May decrease daily decisions for directors

What is the purpose of Administrative and Support Centers?

• To administer the organization

• To manage logistics activities

• To focus on controllable costs

• To focus on revenues