Discussion: Responsibility Accounting
We are exploring decentralization, performance evaluation, and relevant costing for managerial decisions. Let's review some related topics together to assist us with this material.
1. Why should managers be closely involved in preparing their responsibility accounting budgets?
2. What are two main goals in managerial accounting for reporting on and analyzing departments?
3. Please suggest a reasonable basis for allocating each of the following indirect expenses to departments: (a) salary of a supervisor who manages several departments, (b) rent, (c) heat, (d) electricity for lighting, (e) janitorial services, (f) advertising, (g) expired insurance on equipment, and (h) property taxes on equipment.