0
What is a responsibility center that incurs costs and expenses and generates revenues?
Wiki User
∙ 12y ago
It is a Profit Center
Wiki User
∙ 12y ago
Add your answer:
Earn +20 pts
What is an effective method for evaluating a cost center?
Cost centers generate expenses only. A comparison of the actual expenses with the flexible budget amounts allowed at that level is the most effective.
What is the difference between responsibility center and cost center?
nbfksdnkvnn nkjndi kjmdlmldsin nvindnkjbv nvjbbdnmkvf vkniv dkk ijjnkvnidv vkvdjnnkkv
Explain the concept of responsibility accounting?
Collection, summarization, and reporting of financial information about various decision centers (responsibility centers) throughout an organization; also called activity accounting or profitability accounting. It traces costs, revenues, or profits to the individual managers who are primarily responsible for making decisions about the costs, revenues, or profits in question and taking action about them. Responsibility accounting is appropriate where top management has delegated authority to make decisions. The idea behind responsibility accounting is that each manager's performance should be judged by how well he or she manages those items under his or her control.Responsibility and Cost CentersThe concept of responsibility accounting has emerged to accommodate the need for management information at a more specific level of detail than can be provided by financial accounting procedures. Responsibility accounting attempts to report results (actual performance) in such a way that: (1) significant variances from planned performance can be identified, (2) reasons for variances can be determined, (3) responsibility can be fixed, and (4) timely action can be taken to correct problems.Under this approach, pertinent costs and revenues are assigned to various organizational units--departments, bureaus, and programs--designated as responsibility centers. In the private sector, responsibility centers may take several forms:(1) A cost center is the smallest segment of activity or area of responsibility for which costs are accumulated.(2) A profit center is a segment of a business, often called a division, that is responsible for both revenue and expenses.(3) An investment center, like a profit center, is responsible for both revenue and expenses, but also for related investments of capital.Outside of relatively large corporations, the cost center is the most common building block for responsibility accounting. In fact, the terms cost center and responsibility center are often used interchangeably. Responsibility accounting placing emphasis on specific costs in relation to well-defined areas of responsibility. Managers often inherit the effects of their predecessors' decisions. Long-term effects of such costs as depreciation, long-term lease arrangements, and the like, seldom qualify as controllable costs on the performance report of a specific manager.Most models that measure performance in the private sector are tied to profits--for example, profit percentage (profit divided by sales), return on investment (profit divided by initial investment), or residual income (profit minus a deduction for capital costs). Profits are seldom a viable measure at the cost center level, however. Rather, performance is most often measured by comparing actual costs against a budget. A variance is defined as the difference between the amount budgeted for a particular activity and the actual cost of carrying out that activity during a given period.Variances may be positive (under budget) or negative (over budget).Performance data can be developed for management purposes independent of the budget and control accounts. This kind of performance reporting has been used in the justification of resource requests and in the assessment of cost and work progress where activities are fairly routine and repetitive. Under this approach, units of work are identified, and changes in quantity (and, on occasion, quality) of such units are measured as a basis for analyzing financial requirements. The impact of various levels of service can be tested, and an assessment can be made of changes in the size of the client groups to be served. This approach is built on the assumption that certain fixed costs remain fairly constant regardless of the level of service provided and that certain variable costs change with the level of service or the size of the clientele group served. Marginal costs for each additional increment of service provided can be determined through such an approach. With the application of appropriate budgetary guide-lines, these costs can then be converted into total cost estimates.Variances, budgeted results, and other techniques of responsibility accounting are relatively neutral devices. When viewed positively, they can provide managers with significant means of improving future decisions. They can also assist in the delegation of decision responsibility to lower levels within an organization. These techniques, however, are frequently misused as negative management tools--as means of finding fault or placing blame. This negative use stems, in large part, from a misunderstanding of the rationale of responsibility accounting.Passing the buck is an all-too-pervasive tendency in many large organizations. This tendency is supposedly minimized, however, when responsibility is firmly fixed. Nevertheless, a delicate balance must be maintained between the careful delineation of responsibility, on the one hand, and an overly rigid separation of responsibility, on the other. Many activities may fall between the cracks when responsibility is too strictly prescribed. This problem is particularly evident when two or more activities are interdependent. Under such circumstances, responsibility cannot be delegated too far down in the organization, but must be maintained at a level that will ensure cooperation among the units that must interact if the activities are to be carried out successfully.
How much does it cost to open an emissions testing business in ga?
The cost of opening an emissions testing center in GA (Georgia) varies greatly. Factors that play in to cost include building rent, taxes, licenses, payroll, and overhead expenses.
Is Sylvan Learning Center tax deductible?
No. With certain exceptions the things you buy for your children, and basic schooling generally for anyone, are not tax deductible.Added:In Canada; There is a tax credit for: "Tutoring services for individuals with a certified learning or mental impairment;" Refer to IT519R2 (medical expenses) for a complete list.
A unit of a business that not only incurs costs but also generates revenues is called a?
profit center
A segment of a business responsible for both revenues and expenses would be called?
cost center
What is the name of the process in the center of the sun that generates its energy?
Nuclear fusion.
What are examples for responsibility centers?
cost center investment center profit center revenue center
What is major type of responsibility center?
revenue centercost/expense centerprofit centerinvestment center
What is the difference between a revenue center and an expense center as it relates to a human service organization?
A revenue center is where the program manager focuses on bringing in revenue for the program, and an expenses center is where a program manager is responsible for their own expenses. Having a center that is responsible for their own expenses helps keep cost down as they are an everyday part of the program managers job, revenue center also help subsidize programs which can be used to allow flexible cost on certain target groups.
Top call center in the Philippines?
in terms of revenues and clients handled, i think it would be Convergys Philippines Corporation
How the center solar system effects the climate?
The mass center of the solar system is the Sun. The Sun generates the energy that drives the weather and heats the atmosphere.
Resource Advisors are normally appointed by Responsibility Center Managers?
True
What is the main difference between a power plant and a power distribution center?
A power plant generates power while a power distribution center directs the power from a source to a destination.
The financial management board fmb and the financial working group fwg implement a quarterly phased plan that allows the fma office to distribute funds to?
responsibility center managers, who in turn, distribute the funds to cost center managers.
What is an effective method for evaluating a cost center?
Cost centers generate expenses only. A comparison of the actual expenses with the flexible budget amounts allowed at that level is the most effective.
