Final Exam Chp. 12 Study Guide Questions and Answers 2023

cost center, profit center, revenue center, investment center - -What are the 4 types of responsibility centers in a decentralized organization? -cost center - -Held accountable for managing costs (Ex production department or payroll dept.; Performance is costs and nonfinancial measures such as product quality and number units produced -profit center - -Held accountable for profits and losses (generating revenues and controlling costs/expenses) (Ex product line segment) -revenue center - -Held accountable for revenues generated (Ex sales department or online order taking dept.) -investment center - -Held accountable for revenue (profits), expenses (costs/losses) and assets. Responsible for the utilization of capital to contribute to profitability -return on investment - -Amount of income earned relative to the size of its assets (how much profit is generated per dollar of asset invested). Measure of profitability and efficiency. -profitability, efficiency; higher - -ROi is a measure of blank and blank. Do you want this higher or lower? -true - -T or F: Using ROI alone as the decision for making an investment may not be in the best interest of the organization as a whole -profit margin - -measure the ability to turn $1 of sales into profit; measures profitability of organization through the use of cost management. How much profit is earned per dollar of revenue generated. Measu