1. Which of the following is not a cost center?

1. An accounting department
2. A Production department
3. A retail sales depot
4. A maintenance department

2. An Investment center is responsible for:

1. Investing in long term assets.
2. Controlling costs.
3. Generating revenues.
4. All of the above.

3. A Profit center is responsible for all of the following except:

1. Investing in long term assets
2. Controlling costs.
3. Generating revenues.
4. All of the above are the responsibility of a profit center.

4. A cost center is responsible for which of the following?

1. Investment in long-term assets.
2. Controlling costs.
3. Generating revenues.
4. All of the above.

5. Use of profit as a performance measure:

1. May lead to overinvestment in assets.
2. Is appropriate for an investment center.
3. Is appropriate as long as profit is calculated using Generally Accepted Accounting Practices.
4. Encourages managers to finance operations with debt rather than equity.