AC222Chapter12 - My Notes Chapter 12 Segment Reporting and...

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My Notes Chapter 12 – Segment Reporting and Decentralization Decentralized Organization: decision-making authority is spread throughout the organization rather than being confined to a few top executives. Responsibility Center: used for any part of an organization whose manager has control over and is accountable for cost, profit, or investments. There are 3 primary types of responsibility centers…. Cost Center: has control over costs, but not over revenue or the use of investment funds. (incurr costs, but bring in no revenue. They keep control of cost) Ex: Manufacturing Facility Profit Center: has control over both costs and revenue, but no over the use of investment funds. (brings in revenue and controls cost) Ex: Managers or Retail Stores or Six Flags Investment Center: has control over cost, revenue, and investments in operating assets. (Evaluate top Management) Decentralization and Segment Reporting: Segment: is a part or activity of an organization about which managers would like cost, revenue, or profit data. When Contribution Format is used: 1.) The cost of goods sold consists only of the variable manufacturing costs 2.) Variable and fixed costs are listed in separate sections
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AC222Chapter12 - My Notes Chapter 12 Segment Reporting and...

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