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Chapter 24: Q5RQ (page 1355)

Usually, which outweighs the other in decentralization—advantages ordisadvantages?

Short Answer

Expert verified

Answer

The advantages outweigh the other in decentralization.

Step by step solution

01

Meaning of Decentralization

In business terms, decentralization refers to the process of delegating the activities among the various departments and personnel of the organization by the authorized sources, groups, or locations.

02

Factor that outweighs decentralization

The advantages of decentralization outweigh the disadvantages because of the

following reasons:

  • Decentralization helps in improving motivation and retention.
  • This approach lessens the work pressure because it delegates the task to many.
  • Decentralization facilitates the managers to accomplish their tasks with utmost accuracy.

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Most popular questions from this chapter

Fill in the blanks with the phrase that best completes the sentence.Some phrases may be used more than once and some not at all.

Phrases:

  • cost center
  • revenue center
  • investment center
  • lower
  • profit center
  • higher
  • responsibility center

1. The maintenance department at the local zoo is a(n)___________

2. The gift shop at the local zoo is a(n)____________

3. The menswear department of a department store, which is responsible forbuying and selling merchandise, is a(n)_______________

4. The production line at a manufacturing plant is a(n)

5. A( n)________________is any segment of the business whose manager isaccountable for specific activities.

6. A division of a beverage manufacturing company responsible for aparticular brand of soft drink is a(n)_______________

7. The sales manager in charge of a shoe company’s northwest sales territoryoversees a(n)

8. Managers of cost and revenue centers are at_____________ levels of theorganization than are managers of profit and investment centers.______

Question: What is the purpose of a responsibility accounting system?

What are some limitations of financial performance measures?

Financial performance is measured in many ways.

Requirements

1. Explain the difference between lag and lead indicators.

2. The following is a list of financial measures. Indicate whether each is a lag or a lead indicator:

a. Income statement shows net income of \(100,000

b. Listing of next week’s orders of \)50,000

c. Trend showing that average hits on the redesigned Web site are increasing at 5% per week

d. Price sheet from vendor reflecting that cost per pound of sugar for the next month is $2

e. Contract signed last month with large retail store that guarantees a minimum shelf space for Grandpa’s Overloaded Chocolate Cookies for the next year

Explain the difference between market-based transfer prices and cost-based transfer prices.
See all solutions

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