What are some of the uses that management may make of accounting information about individual responsibility centers of the business?

Answered: What are some of the uses that…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter1: Role Of Accounting In Society

Section: Chapter Questions

Problem 4MC: Which of the following groups would have access to managerial accounting information? A. bankers B....

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What are some of the uses that management may make of accounting information about individual responsibility centers of the business?

Expert Solution

What are Responsibility Centers:

In a company, generally, various divisions have been made according to the type and flow of work. For instance, the Production division/department which only does activities as regards to producing the product. The responsibility center is nothing but the three major divisions of the company covering responsibility assigned to all the divisions and departments.

The main three responsibility centers are:

Cost center: Its main responsibility is to look after various costs incurred in the company.

Revenue Center: It is responsible for to account only for revenues earned

Profit Centre: It only focuses on Profits made.

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