SE 2. Identify each of the following as a cost center, a discretionary cost center, a revenue center, a profit center, or an investment center:

1. The manager of center A is responsible for generating cash inflows and incurring costs with the goal of making money for the company. The manager has no responsibility for assets.

2. Center B produces a product that is not sold to an external party but transferred to another center for further processing.

3. The manager of center C is responsible for the telephone order operations of a large retailer.

4. Center D designs, produces, and sells products to external parties. The manager makes both long-term and short-term decisions.

5. Center E provides human resource support for the other centers in the company.

Controllable Costs