Most Large Organizations Establish Responsibility Centers (Sections, Departments, Divisions, Etc

question 6

Essay

Most large organizations establish responsibility centers (sections, departments, divisions, etc.) in order to delegate decision-making authority to the individuals who are best suited to make decisions in those particular centers. Consider the following responsibility centers:
Responsibility Center Description
Required:
1) Three commonly found responsibility centers are cost centers, profit centers, and investment centers. Describe each type of center.2) Which type of center will each most likely be classified as: a cost center, profit center, or investment center?
$\begin{array}{|l|l|}\hline \text { 1) } & \text { Louisville office of a regional CPA firm } \\\hline 2) & \text { Restaurant in a Nordstrom department store } \\\hline 3) & \text { Medical diagnostic equipment unit of General Electric } \\\hline 4) & \text { Maintenance department in a Toyota assembly plant } \\\hline 5) & \text { Cincinnati outlet of the Hampton Inn hotel chain } \\\hline 6) & \text { Home electronics division of Best Buy } \\\hline 7) & \text { Lawnmover division of Honda } \\\hline 8) & \text { Finishing department of a company that makes wooden fencing } \\\hline 9) & \text { Engine assembly department of John Deere } \\\hline 10) & \text { Customer service department of United Airlines } \\\hline 11) & \text { Check processing department of Citibank } \\\hline 12) & \text { Casting department of a small steel mill } \\\hline 13) & \text { Jeep division of Chrysler Motors } \\\hline 14) & \text { Denver location of Barnes and Noble } \\\hline 15) & \text { Baltimore office of an investment banking firm } \\\hline\end{array}$

Understand the basic principles of cost-volume-profit (CVP) analysis.

Identify variable, fixed, and mixed costs and their implication on the break-even point and overall profitability.

Calculate the contribution margin ratio and understand its significance in CVP analysis.

Determine the break-even point in units and dollars.

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Definitions:

Butanoyl Chloride

A four-carbon chain acyl chloride also known as butyryl chloride, used as an intermediate in chemical synthesis.

Reaction Reagents

Substances or compounds added to a system to cause a chemical reaction or are consumed in the reaction.

Nucleophilic Aromatic Substitution

A reaction where an electron-rich nucleophile displaces a leaving group in an aromatic ring, typically under conditions where the aromatic ring is activated towards nucleophilic attack.

2,4-Dinitrochlorobenzene

A chemical compound characterized by a benzene ring with two nitro groups (NO2) and one chlorine atom attached to it at the 2, 4, and 6 positions, respectively.