Identify each of the following responsibility centers as a cost center, a revenu
ID: 2503305 • Letter: I
Question
Identify each of the following responsibility centers as a cost center, a revenue center, a profit center, or an investment center:
a) The Bakery Department of a Publics supermarket reports income for the current year.
b) Pace Foods is a subsidiary of Campbell Soup Company.
c) The Personnel Department of State Farm Insurance Companies prepares its budget and subsequent performance report on the basis of its expected expenses for the year.
d) The Shopping Section Burpee.com reports both revenues and expenses.
e) Burpee.com
Explanation / Answer
a) The Bakery Department of a Publics supermarket reports income for the current year. - Revenue Center because income means revenue
b) Pace Foods is a subsidiary of Campbell Soup Company. - Revenue Center because Pace foods is a revenue generating subsidiary.
c) The Personnel Department of State Farm Insurance Companies prepares its budget and subsequent performance report on the basis of its expected expenses for the year. - Cost Center because expenses are costs.
d) The Shopping Section Burpee.com reports both revenues and expenses. Profit Center since Revenue-Expenses gives us Profit
e) Burpee.com