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Caveman Software operates stores within five regions. Regional managers are held accountable for marketing, advertising, and sales decisions, and all costs incurred within their region. In addition, regional managers decide whether new stores will open, where the stores will be located, and whether the stores will lease or purchase the facilities. Store managers, in contrast, are accountable for marketing, advertising, sales decisions, and costs incurred within their stores.

Ideally, on the basis of this information, what type of responsibility center should the software company use to evaluate its regions and stores?

REGIONS STORES

A. Profit Center Profit Center

B. Profit Center Cost Center

C. Profit Center Revenue Center

D. Investment Center Profit Center

E. Investment Center Cost Center

Respuesta :

Answer:

The correct option is D,investment center profit center

Explanation:

An investment center is a region or division whose management is responsible for its investment decision such opening or closure of a particular segment of the business or even acquisition of its assets.

From the above,no doubt the regions are investment center.

A profit center has autonomous in deciding the costs to be incurred as well as sales decisions,since profit is a function of both sale and costs.

The stores perfectly fit into this description,hence are profit centers.

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