Week 5 DQ 2 - their respective center The company which I work for manufactures health and beauty products An example of its cost center would be

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Week 5, DQ 2 Choose a company and give an example of each of their responsibility centers (profit, cost and investment centers). In your own career, which responsibility center would you like to work for the most? Why? Cost centers – setup to incur costs and expenses, does not directly generate revenues. Cost center managers are authorized to incur costs, and are evaluated on their ability to control costs. Cost centers are, for example, production or service departments. Profit centers – Like cost centers, incur costs and expenses. In addition, profit centers generate revenues. In profit centers, managers are measured on the profitability of their centers. Retail stores are examples of profit centers. Investment centers – Like profit centers, investment centers incur costs and expenses and generate revenues. Additionally, investment centers control funds available for investment purposes. Managers are gauged on the profitability and the rate of return of
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Unformatted text preview: their respective center. The company which I work for manufactures health and beauty products. An example of its cost center would be the production department. In the production department, products are made and incur costs during this process, but does not generate revenues, since the department is not involved in the process of selling the material just produced. An example of a profit center is the Sales Department. The sales department incurs costs and expenses, but also generates sales revenue. An example of an investment center where I work at is left up to executive management, where they make decisions on where to invest funds allocated to the investment of funds, like purchasing other companies. Given a choice, I would like to work in an investment center. I like the idea of deciding how to maximize funds allocated to investing and seeing the funds grow! I would also like to control what companies are purchased....
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This note was uploaded on 10/10/2010 for the course ACC ACC 349 taught by Professor Costaccting during the Spring '10 term at DeVry Irvine.

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