Reference no: EM131691278
A company has three different divisions: Olliepods, Polyspreen, and Monk Recreation.
Given the following information, identify each segment as a cost center, a revenue center, a profit center, or an investment center:
1) The Olliepods division sells children's recreational shoes. The division's president is responsible for all short-run decisions on the manufacturing and sale of the shoes.
2) The Polyspreen division manufactures the main ingredient for the shoes produced by Olliepods. All Polyspreen output is transferred to the Olliepods divsion.
3) All long-run strategic decisions and investments for OlliePods and Polyspreen divisions are made by the staff at corporate headquarters.
4) Monk Recreation, which operates a regional chain of retail sporting goods stores, is the company's newest corporate acquisition. All decision making responsibility (both short-term and long-term) related to the sporting goods stores remains with those employees.
5) Monk Recreation has several sales territories from the Southeast to the Northwest. Managers of these territories are evaluated based on a comparison of current period sales against budgeted sales.
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