1. Why are many companies divided into departments? 2. What is the difference between operating departments and service departments? 3. What are controllable costs? 4. How is the performance of cost center managers evaluated? 5. In responsibility accounting, why are reports to higher-level managers usually less detailed? 6. How are decisions made in decentralized organizations? 7. How is the performance of profit center managers evaluated? 8. What is the difference between direct and indirect expenses? 9. Suggest a reasonable basis for allocating each of the following indirect expenses to departments: (a) salary of a sup several departments, (b) rent, (c) heat, (d) advertising, and (e) property taxes on equipment. 10. How is a department's contribution to overhead measured? 11. Describe the four perspectives of the balanced scorecard. 12. What is a transfer price? What are the three main approaches to setting transfer prices? 13. Under what conditions is a market-based transfer price most likely to be used? 1