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Carrier Corporation produces heating and air conditioning equipment at a number of plants throughout the United States including one in Syracuse, New York. Carrier should evaluate its Syracuse plant as:

Multiple Choice

• A cost center.

• An investment center.

• A committed center.

• A profit center (other than an investment center).

The term responsibility center reflects the idea that the "centers" of a business usually are defined in a manner such that each center is:

Multiple Choice

• Approximately the same size.

• Under the control of a specified center manager.

• Responsible for all business operations in a specific region.

• Responsible for earning a specified amount of profit.

Disneyland charges visitors for admission to the park but not for individual rides or attractions. "Splash Mountain" is one of the rides in Disneyland. The Walt Disney Company should evaluate "Splash Mountain" as:

Multiple Choice

• A revenue center.

• A profit center (other than an investment center).

• A cost center.

• An investment center.

In preparing a responsibility income statement that shows contribution margin and responsibility margin, generally two concepts are involved in allocating costs to the various centers. These concepts are:

Multiple Choice

• Whether the costs are traceable to the responsibility center and whether the responsibility center is organized as a profit center or an investment center.

• Whether the costs are traceable to the responsibility center and whether they are material in dollar amount.

• Whether the costs are variable or fixed and whether they are directly traceable to the responsibility center.

• Whether the costs are variable or fixed and whether they are material in dollar amount.

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