Financial & Managerial Accounting
Financial & Managerial Accounting
14th Edition
ISBN: 9781337119207
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
bartleby

Concept explainers

Question
Book Icon
Chapter 23, Problem 1DQ
To determine

Centralized operations: In a company where the major plans and operating decisions are controlled by the top level management, such a company is said to have centralized operations.

Decentralized operations: In a company where the plans and operating decisions are delegated to the divisional managers, such a company is said to have decentralized operations.

To distinguish: Centralized operations from decentralized operations

Expert Solution & Answer
Check Mark

Explanation of Solution

Differences between centralized and decentralized operations:

Centralized Operations Decentralized Operations
The major operating decisions are controlled by top level management. The major operating decisions are delegated to divisional managers.
Centralized operations are preferable by small businesses, where one man can handle all the operations. Decentralized operations are delegated to the managers with expertise in the respective production lines and services.
Since the business is small and can be controlled by one person, it is easy to maintain the operations, and not much experience is necessary. Since the product lines and numerous, top level management cannot alone control all the operations, and may not have expertise in all departments.

Table (1)

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
Please differentiate between centralized and decentralized operations.
Distinguish between the centralized and distributed approaches to organizing the IT function.
Describe the benefits of decentralization.

Chapter 23 Solutions

Financial & Managerial Accounting

Ch. 23 - Budgetary performance for cost center Vinton...Ch. 23 - Service department charges The centralized...Ch. 23 - Income from operations for profit center Using the...Ch. 23 - Profit margin, investment turnover, and ROI Briggs...Ch. 23 - Residual income The Commercial Division of Galena...Ch. 23 - Transfer pricing The materials used by the...Ch. 23 - Budget performance reports for cost centers...Ch. 23 - Divisional income statements The following data...Ch. 23 - Service department charges and activity bases For...Ch. 23 - Service department charges In divisional income...Ch. 23 - Service department charges and activity bases...Ch. 23 - Divisional income statements with service...Ch. 23 - Prob. 23.8EXCh. 23 - Profit center responsibility reporting XSport...Ch. 23 - Return on investment The income from operations...Ch. 23 - Prob. 23.11EXCh. 23 - Determining missing items in return on investment...Ch. 23 - Profit margin, investment turnover, and return on...Ch. 23 - Prob. 23.14EXCh. 23 - Prob. 23.15EXCh. 23 - Determining missing items from computations Data...Ch. 23 - Prob. 23.17EXCh. 23 - Building a balanced scorecard Hit-n-Run Inc. owns...Ch. 23 - Decision on transfer pricing Materials used by the...Ch. 23 - Prob. 23.20EXCh. 23 - Prob. 23.1APRCh. 23 - Profit center responsibility reporting for a...Ch. 23 - Divisional income statements and return on...Ch. 23 - Effect of proposals on divisional performance A...Ch. 23 - Divisional performance analysis and evaluation The...Ch. 23 - Prob. 23.6APRCh. 23 - Budget performance report for a cost center The...Ch. 23 - Profit center responsibility reporting for a...Ch. 23 - Divisional income statements and return on...Ch. 23 - Effect of proposals on divisional performance A...Ch. 23 - Divisional performance analysis and evaluation The...Ch. 23 - Prob. 23.6BPRCh. 23 - Prob. 1ADMCh. 23 - Domino's Pizza: Franchise segment return on...Ch. 23 - Prob. 3ADMCh. 23 - Prob. 23.1TIFCh. 23 - Prob. 23.3TIF
Knowledge Booster
Background pattern image
Accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Text book image
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Text book image
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Text book image
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College