Question
Swiss Corporation has three production plants (X, Y, and Z). Following is a summary of the results for January 2009: Plant Revenues Expenses Investment Base
Swiss Corporation has three production plants (X, Y, and Z). Following is a summary of the results for January 2009: Plant Revenues Expenses Investment Base (gross assets) X $ 720,000 $ 300,000 $ 1,440,000 Y 960,000 180,000 1,920,000 Z 5,040,000 1,920,000 13,200,000 a. If the plants are treated as profit centers, which plant manager appears to have done the best job?, b. If the plants are treated as investment centers, which plant manager appears to have done the best job? (Assume the plant managers are evaluated by return on investment.) and c. Do the results of profit center analysis and investment center analysis give different findings? If so, why?
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