Transcript Work The Core Operation of Responsibility Center Output

Responsibility Centers
The Core Operation of Responsibility
Center
Input
Resources used,
measured by cost
Output
Work
Capital
Goods or
services
The products produced by a responsibility center may
be furnished either to another responsibility center
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(as input) or to the outside marketplace (as output)
Responsibility Centers
Types of Responsibility Centers
Engineered Expense Centers
Optimal relationship
can be establish
Inputs
Work
(Dollar)
Examples
Outputs Manufacturing
function
(Physical)
2
Responsibility Centers
Types of Responsibility Centers
Discretionary Expense Centers
Optimal relationship…….
……..
..
..
cannot
be
establish
.
.
..
.
..
Outputs
Inputs
Work
(Dollar)
Examples
R&D
function
(Physical)
3
Responsibility Centers
Types of Responsibility Centers
Revenue Centers
Input do not related…….
……..
..
..
to
outputs
.
.
..
.
..
Outputs
Inputs
Work
(Dollar only for
costs directly incurred
Examples
Marketing
function
(Dollar revenue)
4
Responsibility Centers
Types of Responsibility Centers
Profit Centers
..……..
..
..
Input are related …….
..
to outputs
.
..
Outputs
Inputs
Work
(Dollar costs)
Examples
Business
unit
(Dollar profits)
5
Responsibility Centers
Types of Responsibility Centers
Investment Centers
Profits are related …….
……..
..
..
to
capital
employed
.
.
..
.
Inputs
(Dollar costs)
Examples
..
Capital
Employed
Outputs
Business
unit
(Dollar profits)
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