Costs related to the expansion and enhancement of an organization can be just as essential (and large) as costs related to routine business operations. It is important for companies to avoid stagnation and remain abreast of market trends and innovation. This can be achieved through marketing and research and development (R&D), which, as all other business functions, need funding and budgeting. As an HR manager, think about how innovation can be encouraged through initiatives which reward and develop employees.

For this week's Application, you will analyze costs related to marketing and R&D. You will review the following scenarios and information and use the concepts of return on investment, performance, and other ideas introduced in this week's Resources to draw conclusions related to questions posed in the prompts.

You will set up and use an Excel spreadsheet for all your calculations for the problems below, and the spreadsheet you develop should be what you turn in for the Application.Note:TheResourcessection includes tutorials for those who might need help in designing and using an Excel spreadsheet.

1. Define a revenue center, a cost center, a profit center, and an investment center. Give an example of each type of center. Where appropriate refer to specific examples within Human resources.
3. Harrison Handbags has an advertising budget of $150,000. The company believes that if it increases the advertising budget by $24,000, it will sell an additional 32,000 purses and each purse will provide an additional profit to the company of $1.00 before consideration of the advertising costs. What additional profit should the company expect if it accepts the proposed budget increase?
5. Brent Bybee is the manager of the packaging department of the Carnival Candy Company. He is responsible for all costs of his department except rent, property taxes, and salaries.