MANAGERIAL ACCTG.<LL>W/CONNECT+LRSMRT
3rd Edition
ISBN: 9781259738531
Author: Whitecotton
Publisher: MCG CUSTOM
expand_more
expand_more
format_list_bulleted
Question
Chapter 10, Problem 2ME
To determine
Concept introduction:
Decentralized company:
It is the company in which most decisions is taken by middle level or lower-level managers in their respective area and not centrally. So, it can be said that it is opposite to centralized management.
Centralized company:
It is the company in which all the decisions and processes are handled by top level or executive level management. The lower level managers and workers follow that decision or ask for permission before taking any decisions.
The advantage and disadvantage for decentralized and centralized company.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
MULTIPLE CHOICE
Which of the following is the main assumption that is made about managers in general in support of decentralization?
Managers at the local/divisional level will act in the best interest of the organization
Top managers at corporate headquarters will act in the best interest of the organization
Top managers at corporate headquarters have access to better information for operational decisions
Managers at the local/divisional level have access to better information for operational decisions
Kirkland Company has several service departments that provide services to each other as well as to operating departments within the company. Which method would be least accurate in allocating the company's service department costs?
The sequential method
The direct method
The step-down method
The reciprocal method
Which of the following is an example of a committed fixed cost?
A training program for salespersons
Executive travel expenses
Property taxes on the factory…
Decentralized businesses can have three responsibility centers that must be evaluated differently because of their functions.
Describe the three responsibility centers and give an example of each from your work.
Give an explanation about how each is evaluated.
Tell us why you would prefer to work in a centralized or decentralized organization.
Discuss which type of responsibility center you would prefer to manage and why.
Mastery Problem: Evaluating Decentralized Operations
BOR CPAs, Inc.
BOR, a decentralized organization, is interested in evaluating the performance of the two divisions. The stockholders are responsible for deciding on investment in the two divisions. Cyrus Bailey is in charge of the performance evaluation, and turns to you for assistance. Mr. Bailey is only interested in evaluating operations at the profit center (division) level, and not at the cost center (department) level.
Mr. Bailey is considering temporarily using some of the staff from the Tax Division to assist the Audit Division during the upcoming busy audit season, and would like to evaluate the effect of this on net income. The Tax Division is estimated to have 800 hours of excess capacity.
The unit for determining sales revenue in both divisions is the "engagement", which means the total agreed-upon work for a given client in either audit or tax for a given year. The company charges on average a fee of $75,000 per…
Chapter 10 Solutions
MANAGERIAL ACCTG.<LL>W/CONNECT+LRSMRT
Ch. 10 - Explain how centralized and decentralized...Ch. 10 - Why does decentralization create the need for...Ch. 10 - What is the controllability principle and why is...Ch. 10 - Prob. 4QCh. 10 - Prob. 5QCh. 10 - Prob. 6QCh. 10 - Prob. 7QCh. 10 - Prob. 8QCh. 10 - Return on investment may be separated into two...Ch. 10 - Prob. 10Q
Ch. 10 - Prob. 11QCh. 10 - Prob. 12QCh. 10 - Prob. 13QCh. 10 - Prob. 14QCh. 10 - Prob. 15QCh. 10 - Prob. 16QCh. 10 - Prob. 17QCh. 10 - Why must a company consider its incentive and...Ch. 10 - Prob. 19QCh. 10 - Prob. 20QCh. 10 - Prob. 21QCh. 10 - Prob. 22QCh. 10 - Prob. 23QCh. 10 - Prob. 24QCh. 10 - Prob. 25QCh. 10 - What are negotiated transfer prices? Explain two...Ch. 10 - Sally Thorne is a profit center manager for ABC...Ch. 10 - Prob. 2MCCh. 10 - Which of the following statements is true? a. A...Ch. 10 - Prob. 4MCCh. 10 - Prob. 5MCCh. 10 - Prob. 6MCCh. 10 - Prob. 7MCCh. 10 - Prob. 8MCCh. 10 - Which of the following is not a component of the...Ch. 10 - Prob. 10MCCh. 10 - Using Terms to Complete Sentences about...Ch. 10 - Prob. 2MECh. 10 - Prob. 3MECh. 10 - Applying Balanced Scorecard to Real World Company...Ch. 10 - Applying Balanced Scorecard to Online Company...Ch. 10 - Prob. 6MECh. 10 - Prob. 7MECh. 10 - Prob. 8MECh. 10 - Prob. 9MECh. 10 - Prob. 10MECh. 10 - Prob. 11MECh. 10 - Prob. 12MECh. 10 - Prob. 13MECh. 10 - Prob. 2ECh. 10 - Prob. 3ECh. 10 - Prob. 4ECh. 10 - Calculating Return on Investment, Residual Income,...Ch. 10 - Prob. 6ECh. 10 - Evaluating Managerial Performance Using Return on...Ch. 10 - Evaluating Managerial Performance Using Return on...Ch. 10 - Prob. 9ECh. 10 - Determining the Impact of Various Transactions on...Ch. 10 - Determining Different Types of Responsibility...Ch. 10 - Prob. 14ECh. 10 - Prob. 15ECh. 10 - Prob. 16ECh. 10 - Matching Measures of Performance with the Correct...Ch. 10 - Determining Minimum, Maximum, Negotiated Transfer...Ch. 10 - Prob. 19ECh. 10 - Prob. 20ECh. 10 - Calculating Return on Investment, Residual Income,...Ch. 10 - Prob. 1.2GAPCh. 10 - Calculating Unknowns, Predicting Relationship...Ch. 10 - Calculating Unknowns, Predicting Relationship...Ch. 10 - Prob. 2.3GAPCh. 10 - Prob. 2.4GAPCh. 10 - Prob. 2.5GAPCh. 10 - Prob. 2.6GAPCh. 10 - Prob. 3.1GAPCh. 10 - Prob. 3.2GAPCh. 10 - Prob. 3.3GAPCh. 10 - Prob. 3.4GAPCh. 10 - Prob. 3.5GAPCh. 10 - Prob. 3.6GAPCh. 10 - Prob. 4.1GAPCh. 10 - Prob. 4.2GAPCh. 10 - Prob. 4.3GAPCh. 10 - Prob. 4.4GAPCh. 10 - Prob. 4.5GAPCh. 10 - Prob. 5.1GAPCh. 10 - Prob. 5.2GAPCh. 10 - Prob. 5.3GAPCh. 10 - Prob. 5.4GAPCh. 10 - Prob. 6GAPCh. 10 - Prob. 1.1GBPCh. 10 - Prob. 1.2GBPCh. 10 - Prob. 2.1GBPCh. 10 - Prob. 2.2GBPCh. 10 - Prob. 2.3GBPCh. 10 - Prob. 2.4GBPCh. 10 - Prob. 2.5GBPCh. 10 - Prob. 2.6GBPCh. 10 - Prob. 3.1GBPCh. 10 - Prob. 3.2GBPCh. 10 - Prob. 3.3GBPCh. 10 - Prob. 3.4GBPCh. 10 - Prob. 3.5GBPCh. 10 - Prob. 3.6GBPCh. 10 - Prob. 4.1GBPCh. 10 - Prob. 4.2GBPCh. 10 - Prob. 4.3GBPCh. 10 - Prob. 4.4GBPCh. 10 - Prob. 4.5GBPCh. 10 - Prob. 5.1GBPCh. 10 - Prob. 5.2GBPCh. 10 - Prob. 5.3GBPCh. 10 - Prob. 5.4GBPCh. 10 - Prob. 6GBP
Knowledge Booster
Similar questions
- Examine the placement of the manager of HR systems in the organization chart of Figure 14.2 (pg. 541) and review the typical functional responsibilities of this manager, decisions made, and information needs as shown in Table 14.1 (pp. 541542). Describe possible alternatives for the placement of this function in the formal organization chart, and discuss the relative advantages for each placement. Consider the variables of centralized versus decentralized organizational structures.arrow_forwardAssume you have been hired by Cabelas Sporting Goods. As part of your new role in the accounting department, you have been tasked to set up a responsibility accounting structure for the company. As your first task, your supervisor has asked you to give an example of a cost center, profit center, and an investment center within the Cabelas organization. Your supervisor is a little unsure of the difference between a profit center and investment center and would like you to explain the difference.arrow_forwardManagers in decentralized organizations make decisions relating to all of the following except_______. A. the companys stock price B. equipment purchases C. personnel D. prices to charge customersarrow_forward
- In a centralized organization, where are goals established? A. at the lower level of the organization and promoted upward B. outside the organization based on best practices in the industry C. by each segment of the organization D. at the highest level of the organization and promoted downwardarrow_forwardWhat should an organization do if performance measures change? A. Make sure that the manager being evaluated is aware of the measurement change, as this may affect his or her decision-making. B. Make sure that the manager benefits without the corporation also benefitting. C. Make sure that there are significant overriding opportunities for each manager, if the manager is unaware of the change. D. Obtain customer surveys on the change before communicating the change to the manager.arrow_forwardAssume you have been hired by Hilton Hotels and Resorts. As part of your new role in the accounting department, you have been tasked to set up a responsibility accounting structure for the company. As your first task, your supervisor has asked you to give an example of a cost center, profit center, and an investment center within the Hilton organization. Your supervisor is a little unsure of the difference between a profit center and investment center and would like you to explain the difference.arrow_forward
- ORGANIZATION STRUCTURE AND SPAN OF CONTROL Refer to the organization charts labeled Structure A and Structure B in the figure for problem 12. Required a. For the organizational structure A, describe the 1. advantages and disadvantages of this structure. 2. impact of the resulting span of control. 3. effect of the organizational structure on employee behavior. b. For the flat organizational structure B, describe the 1. advantages and disadvantages of that organizational structure. 2. impact of the resulting span of control. 3. effect of the organizational structure on employee behavior. c. When determining the appropriate span of control for a company, discuss the factors that should be considered.arrow_forwardWhich of the follow is an advantage of decentralization? Group of answer choices Decision made by one manager may have a negative impact on the performance of a manager of another department. Duplication of services since different departments use their own admin and support services. Departmental goals and the goals of the company not be congruent or aligned. Managers can make decisions quickly without having to wait for approval from upper management.arrow_forwardUnderstanding today’s business environmentMatch the following terms to the appropriate statement. Some terms may be used more than once, and some terms may not be used at all. a. A management system that focuses on maintaining lean inventories while producing products as needed by the customer. b. A philosophy designed to integrate all organizational areas in order to provide customers with superior products and services while meeting organizational objectives. c. Integrates all of a company’s functions, departments, and data into a single system. d. Adopted by firms to conduct business on the Internet.arrow_forward
- Differentiate between centralized and decentralized operations. Differentiate between a profit center and an investment center. Weyerhaeuser developed a system that assigns service department expenses to user divisions on the basis of actual services consumed by the division. Here are a number of Weyerhaeuser's activities in its central Financial Services Department: Payroll Accounts payable Accounts receivable Database administration—report preparation What is the major shortcoming of using income from operations as a performance measure for investment centers? In a decentralized company in which the divisions are organized as investment centers, how could a division be considered the least profitable even though it earned the largest amount of income from operations? How does using the return on investment facilitate comparability between divisions of decentralized companies?arrow_forwardClassify the performance measures below into the most likely balanced scorecard perspective itrelates to. Label your answers using C (customer), P (internal process), I (innovation and growth), or F(financial). Number of days of employee absencesClassify the performance measures below into the most likely balanced scorecard perspective itrelates to. Label your answers using C (customer), P (internal process), I (innovation and growth), or F(financial). Number of days of employee absencesarrow_forwardDecision Making with Managerial Accounting Due to varying business characteristics, the managerial accounting techniques applied in each business may differ. For example, a business in the start-up phase may rely heavily upon budgeting and capital investment techniques; whereas, a business in the mature/maintaining phase may rely heavily upon cost management and quality control. Ultimately, the techniques used by management should assist the business in achieving its short-term and long-term goals through effective decision-making. For your Final Paper, you will analyze the role of managerial accounting in two parts. Part I will provide a general overview of managerial accounting. Part II will provide examples of how managerial accounting theories and principles are applied in the business world. You may find it helpful to reflect upon your own professional experiences for examples. Part I (three to four double-spaced pages, excluding the title…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax CollegeAccounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,Pkg Acc Infor Systems MS VISIO CDFinanceISBN:9781133935940Author:Ulric J. GelinasPublisher:CENGAGE L
- Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College PubFinancial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Pkg Acc Infor Systems MS VISIO CD
Finance
ISBN:9781133935940
Author:Ulric J. Gelinas
Publisher:CENGAGE L
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning