Project Description:

You have been hired as a Cost Accountant by Sundial, Inc., which produces sunglasses. Your duties include developing cost standards for materials and labor, designing and implementing cost accounting systems, defining various product and operational costs, analyzing production costs and recommending changes. When the trial period is over, you will have a performance review to demonstrate the completed tasks and gained knowledge.

In order to achieve the purpose of delegation, controlling tasks, and improving decision-making, Sundial, Inc. decides to decentralize and introduce a Management Control System. As a new assignment, your boss asks you to prepare a proposal for Responsibility Accounting, which implies creation of four decentralized units (responsibility centers).

The organizational structure of Sundial, Inc. looks as follows:

Read the following articles and answer the questions below:

• “Responsibility Center” https://www.wallstreetmojo.com/responsibility-center/
• “4 Types of Responsibility Centers” https://www.yourarticlelibrary.com/accounting/responsibility-accounting/4-types-of-responsibility-centres/52904
• Explain in your own words what Responsibility Centers are. What are the four types of responsibility centers? Provide at least two advantages and two disadvantages of responsibility centers.
• Design the project to implement the decentralized structure in Sundial, Inc. that includes creating responsibility centers. Identify the divisions that are going to represent each of the four types of the responsibility centers. Explain the functions of each of the responsibility centers and how they are going to be exercised by the divisions.

The organizational structure of Sundial, Inc. looks as follows: Sundial, Inc. President and CEO Divisions Vice President Finance CFO Sunglasses Product Manager Sunglasses Plant Manager Sunglasses Distribution Manager Legal General Counsel Personnel Vice President