ACC501 SLP Module 3 Transfer Pricing and Responsibility Centers

Name
Session Long Project
Module 3Transfer Pricing and Responsibility Centers
ACC501 SLP MOD 3
Date
1. Difference of centralized and decentralized structure?
* In centralization structures authority for decision making is in few hands, mostly at the top
* In centralization responsibility, power and authority are concentrated
* Centralization is associated with maximum constraints and managers at the low level exercising minimum freedom.
* A centralized structure is mostly organized by functions
* Decentralization the authority to make decisions is delegated and the low-level managers are allowed to make decisions as they have freedom in the decision making process.
* Delegation of the corresponding decision-making capacity (Ferrell, Fraedrich & Ferrell, 2017)
* A decentralized structure has strategic business units each with their own profit and loss accountability
* Implementing a financial control system is based on the presence of responsibility and profit centers.
* Decentralization allows the development of an operating account in each division or profit center.
2. What are Responsibility centers and the functions of it?
* A responsibility center refers to unit within a business with a manager responsible for these units and for improving performance
* Managers are held accountable for an organization unit.
* Managers achieve the objectives of the whole organization.
* Measuring performance for each responsibility center improves performance for the whole organization.
* The goals of each responsibility center are established and there is coordination of activities for each responsibility center to meet the goals of the larger organization
* Open and strong communication makes facilitates working together
* Ensures that the activities are not disjointed
* Feedback and evaluating performance for units
* Enterprise resource planning systems to integrate the organization’s activities.
3. How do cost center drain organizations? Could internal charge backs be implemented? MUST!! Present specific ideas.
* Cost centers are responsibility where the employees control costs but not the revenues or investments.
* Con...