DingDong Corp., a manufacturing company, has three divisions, and each produces a different item: widgets, what chmacallits, and who sey-whats its. Each product is distinctly different, so the divisions do not share raw material, labor, or machinery.
Required:
(a) If the Widgets Division were a cost center, list several costs for which the division manager would be responsible.
(b) How would your answer in part (a) change if the Widgets Division were a profit center?
(c) How would your answers from parts (a) and (b) change if the Widgets Division were an investment division?
(d) Would it be possible for the Widgets Division to be an investment center if the three divisions used similar raw material? Explain.
(e) Would it be possible for the Widgets Division to be an investment center if the three divisions shared machinery? Explain.
(f) Assume that the widgets, whatchamacallits, and whosey-whats its were transferred to a fourth division that puts them together to make a final product. Would it be possible for the Widgets Division to be a profit center? Explain.