Page 138 - BA2 Integrated Workbook - Student 2017

Chapter 9

1.3 Responsibility accounting

 Cost centre managers might be interested in assessing the costs incurred by a
particular responsibility centre within their area.

 Revenue centre managers might be interested in assessing the revenue
generated by a particular responsibility centre within their area.

 Profit centre managers might be interested in assessing the profitability of a
particular product or service, in which case, costs might be classified by nature
so that they can be traced to individual products or services.

 Investment centre managers will be interested in assessing the return being
made by a product or service centre in relation to the capital outlay for that
product or service.

Different types of organisations require different types of performance measures and
different areas within an organisation require different measures.

Measures are especially relevant to managers if the manager has control over the
costs and revenues.

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