Question:
1. The printing department of a large corporation informs the marketing department that the price of printing 100,000color flyers will be $60,000.The marketing department submits the material for the flyer two weeks later than originally planned and tells the printing department that the scheduled date of completion has been advanced two weeks. In order to achieve the new schedule, the printing department incurs an additional production cost of $15,000.
1.In an organization using responsibility accounting, where would the additional costs be assigned? Would these costs be considered controllable costs? What effect might this have on future printing orders from the marketing department?
2. In an organization that does not use responsibility accounting, where would the various costs be assigned? What effect might this have on future printing orders from the marketing department?