Question 1: What is the fundamental principle of responsibility accounting?
Question 2: List five important factors that should be considered in designing reports for a responsibility accounting system.
Question 3: How soon should accounting reports be prepared after the end of the performance measurement period? Explain.
Question 4: Name and describe three types of responsibility centers and list their main characteristics.
Question 5: Give five real-world examples of at least two of the types of responsibility centers.
Question 6: Many organizations limit the number of expense (cost) centers.
Question 7: List three reasons for wanting to limit cost centers.
Question 8: List three ideas for eliminating or reducing the size of an existing cost center.
Question 9: What is the connection between the extent of decentralization and the investment center concept?
Question 10: Give some of the advantages of decentralization.
Question 11: Differentiate between a direct cost and an indirect cost of a segment. What happens to these categories if the segments to which they are related are eliminated?
Question 12: Real-World Example: What is are organizations that are using responsibility centers as part of an organizational structure?