Answer: a. Cost center b. Investment center. c. Revenue center d. Profit center. d. Investment center.
Explanation:
a. Cost center
We are informed that Terrin Belson, a plant manager for the laser printer factory of Compugear Inc., complained that two machines had broken down, and some factory production workers were idled for part of the month. He also complained that materials prices has and insurance premiums on the factory has increased and costs were going up.
The responsibility center involved here is the cost center. Everything he was complaining about was with regards to the rise on costs of running the company. Therefore, the cost center should be in charge.
b. Investment center
We are told that Joanna Pauly was delighted to see that her ROI figures had increased for the third straight year as she was sure that her campaign to lower costs and efficiently use of machinery was the reason for this.
This is the responsibility of the investment center. We can see that Joanna is talking about the increase in the return on investment. Therefore, the investment center should be responsible to handle this.
c. Revenue center
From the information, we are told that Gil Rodriguez, sales manager for ComputerWorks, was not pleased with a memo from headquarters detailing recent cost increases for the laser printer line. The headquarters suggested that increase in prices will kill sales and that the revenue will go down.
The responsibility center involved in this situation is the revenue center. We can see that the headquarters was concerned that the increase will in price will affect revenue as the revenue will reduce. This is the revenue center in charge.
d. Profit center
We are told that Susan Whitehorse looked at the quarterly profit and loss statement with disgust as the revenue was down, and the cost was up. The responsibility center in charge here is the profit center as the main issue of discussion is about the profit and loss of the company.
e. Investment center
We are told that Shonna Lowry had just been hired to improve the fortunes of the Southern Division of ABC Inc. and that after meeting with top staff, she gave out a 3-year plan to improve the situation as obsolete equipment will be retired and the state-of-the-art, computer-assisted machinery will be bought.
This is an investment because she told the firm to buy state-of-the-art, computer-assisted machinery will be bought in order to improve their fortunes. The responsibility center involved is the investment center.
