ACCT2320 - CH. 11.4 - 11.5

Match the responsibility centres:

Cost centre

• retail stores, bank branches

• production, customer service

• product line

Match the responsibility centres:

Profit centre

• retail stores, bank branches

• production, customer service

• product line

Match the responsibility centres:

Investment centre

• retail stores, bank branches

• production, customer service

• product line

no income generation responsibility

• Cost centres

• Profit centres

• Investment centres

managers are evaluated based on ability to operate within cost budget

• Cost centres

• Profit centres

• Investment centres

responsible for "bottom line" profits (makes profits and incurs costs)

• Cost centres

• Profit centres

• Investment centres

managers are evaluated on their performance compared to budget in achieving or exceeding their profit target

• Cost centres

• Profit centres

• Investment centres

Profit centre: looks at manager's controllable

Controllable margin:

report _ show non-controllable fixed costs

• does

• does not

Controllable by profit centre manager:

• property taxes on the head office, HR department

• supervisor in profit centre, payroll costs for the centre's employees