A cost center manager:
a. would normally be held accountable for producing an adequate return on invested capital.
b. does not have the ability to produce revenue.
c. may be the manager who oversees the operations of a retail store.
d. may be involved with the sale of new marketing programs to clients.
e. often oversees divisional operations.
Question text
Leisure Time owns six hotels in Hawaii, collectively known as the Hawaiian Division. The various hotels, including the Surf & Sun, have operating departments (such as Maintenance, Housekeeping, and Food and Beverage) that are evaluated as either cost centers or profit centers. The Food and Beverage Department, for example, is a profit center, with activities divided into three segments: Banquets and Catering, Restaurants, and Kitchen. If Leisure Time uses a performance-reporting system that is based on responsibility accounting, which of the following disclosures is likely to occur?
a. The profit of the Surf & Sun hotel will appear on the Hawaiian Division's performance report.
b. The profit of the Surf & Sun hotel will appear on Food and Beverage's performance report.
c. The Food and Beverage profit at the Surf & Sun will appear on Leisure Time's performance report.
d. The Food and Beverage Department's profit will appear on Kitchen's performance report.
e. The detailed operating costs of the Surf & Sun's Kitchen Department will appear on the Hawaiian Division's performance report.
Question text
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