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

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
1. Louisville office of a regional CPA firm
2. Restaurant in a Nordstrom department store
3. Medical diagnostic equipment unit of General Electric
4. Maintenance department in a Toyota assembly plant
5. Cincinnati outlet of the Hampton Inn hotel chain
6. Home electronics division of Best Buy
7. Lawnmower division of Honda
8. Finishing department of a company that makes wooden fencing
9. Engine assembly department of John Deere
10. Customer service department of United Airlines
11. Check processing department of Citibank
12. Casting department of a small steel mill
13. Jeep division of Chrysler Motors
14. Denver location of Barnes and Noble
15. Baltimore office of an investment banking firmRequired:Three commonly found responsibility centers are cost centers, profit centers, and investment centers. Describe each type of center.Which type of center will each most likely be classified as: a cost center, profit center, or investment center?