Q:
Recognize types of responsibility centers
Recognize each responsibility center as a cost center, a profit center, a revenue center or an investment center.
a. Coca-Cola's investor relations website gives operating and financial information to investors and other interested parties.
b. The manager of the Speedway, a convenience store and gasoline located in Forest Lake, Minnesota, is evaluated based on the station's revenue and expenses.
c. A charter airline records expenses and revenues for each airplane each month. Each airplane's performance report shows its ratio of operating income to average book value.
d. The manager of the southwest sales territory is computed based on a comparison of existing period sales against budgeted sales.
e. The Pharmacy Department of an Acme supermarket reports income for the existing year.
f. Speedway is a subsidiary of Marathon Oil Corporation; Speedway owns and operates about 1,350 gasoline and convenience stores in the United States.
g. The Human Resources Department of the Progressive Group of Insurance Companies prepares its budget and succeeding performance report on the basis of its expected expenses for the year.
h. The shopping section of Burpee.com reports both expenses and revenues.