1. your own words describe a decentralized organization. Compare and contrast it to a centralized organization.
2. The text states advantages and disadvantages of decentralization. What are they?
3. What is the basic idea of a responsibility center.
4. How does the concept of responsibility accounting personalize the topic?
5. Compare and contrast cost, profit, and investment centers. What characteristic(s) distinguish each of these centers. How would you describe a revenue center? Which centers would it fit within?
6. Why is net operating income versus net income used in calculations such as the ROI formula?
7. What accounts are included as operating assets?
8. What does the term margin express to a manager?
9. What does the term turnover express to a manager?
10. What are criticisms of using return on investment as an evaluation metric?
11. What information does residual income provide to managers?
12. How is residual income superior to return on investment?