BUS 254 Chapter 11: Chapter 11.docx

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 254
• Professor: Arsineh Garabedian

Document Summary

Responsibility accounting is used to measure the performance of people and departments to foster goal congruence. Most organizations divided into small units (segments: manager is held accountable for specified financial results, may be a geographic region, division, department, product line, etc. o. Performance measures are set for segments in order to evaluate managers" performance. 4 categories: cost center an organizational subunit where a manager is held responsible only for cost (painting department in an automobile plant) The painting department in an automobile plant: revenue center a manager is held accountable only for revenues. The reservation department of an airline o o. Profit center where a manager is responsible for revenues and expenses. Often a division of a large corporation. A manager is accountable for profits and the invested capital used by the subunit. Superior foods corporation provides an example of the various kinds of responsibility centers that exist in an organization o. Superior foods corporation headquarters president and ceo and.