EXERCISE MODULE 6

RESPONSIBILITY ACCOUNTING

EX 1

Identify each responsibility center for the given scenario

1. The bakery department of a Public supermarket reports income for the current year.
2. Pace foods is a subsidiary of Campbell soup.
3. The personnel department of State Farm Company prepares its budget and subsequent
performance report on the basis of its expected expenses for the year.
4. The shopping section of Burpee.Com reports both revenues and expenses.
5. Burpee.com’s investor relations. Web site provides operating and financial information to
investors and other interested parties.
6. The manager of a BP service station is evaluated based on the station’s revenues and
expenses.
7. A charter airline records revenues and expenses for each airplane each month. Each
airplane’s performance report shows its ratio of operating income to average book value.
8. The manager of the southwest sales territory is evaluated based on a comparison of
current period sales against budgeted sales.

Ex 2

Identify each responsibility center for the given questions below

____ The manager of the Midwest region is evaluated based on a comparison of current
period sales against budgeted sales.
____ Taco Bell is a subsidiary of PepsiCo.
____ The books section of eBay.com reports both revenues and expenses.
____ The personnel department of XYZ Company prepares its budget and performance report
on the basis of its expected expenses for the year.
____ The fresh foods section of the local grocery store reports operating income for the
current year.
____ Cingular Wireless provides customer support via its website.
____ The manager of the local fast food restaurant is evaluated based on the store’s revenues
and expenses.
____ Free Ride Limos, a local charter limousine service, tracks the revenue and expenses for
each vehicle in its fleet. The vehicles’ performance reports show the ratio of operating income
to average book value for each limo.

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Ex 3

Identify each responsibility center as a cost center(C), a revenue center (R), a profit center (P),
or an investment center (I).

a. The menswear department at Bloomingdale’s, which is responsible for buying and

selling merchandise
b. The regional factory manager in charge if introducing new product development
c. The sales manager in charge of Nike’s northwest sales territory overseas.
d. The manager of human resource department of IKEA Company
e. A department’s manager of McDonald branch.

BALANCE SCORECARD PERSPECTIVE

Ex 1

On the line in front of each statement, enter the letter of the balanced scorecard perspective that
it addresses. An item may be used more than once or not at all.

A) financial perspective
B) customer perspective
C) internal business perspective
D) learning and growth perspective

____ Employee turnover rate

____ Customer retention
____ Machine downtime
____ Wait time per order prior to start of production
____ Gross margin growth

Ex 2

On the line in front of each statement, enter the letter of the balanced scorecard perspective that
it addresses. An item may be used more than once or not at all.

F) financial perspective
C) customer perspective
I) internal business perspective
L)Learning and growth perspective

____ Return on investment

____ Customer satisfaction ratings
____ Number of warranty claims
____ Employee satisfaction
____ Revenue growth

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Ex 3

On the line in front of each statement, enter the letter of the balanced scorecard perspective that
it addresses. An item may be used more than once or not at all.

F) financial perspective
C) customer perspective
I) internal business perspective
L) learning and growth perspective

____ Number of employee suggestions implemented

____ Number of new products developed
____ Percentage of market share
____ Number of repeat customers
____ Percentage of sales force with access to real-time inventory levels

Ex 4

On the line in front of each statement, enter the letter of the balanced scorecard perspective that
it addresses. An item may be used more than once or not at all.

F) financial perspective
C) customer perspective
I) internal business perspective
L) Learning and growth perspective

____ Economy Value Added (EVA)

____ Average machine set-up time
____ Employee turnover rate
____ Finished products per day per employee
____ Number of new customers