Eatsy manufacturing creates a master budget that includes budgets for each of the responsibility centers of the company using input from the person responsible for each center. Decision-making responsibility is given to each of the managers of their responsibility centers. Manuel is a production supervisor responsible for managing the packaging line that produces organic food bars. Each month, he gets a report that shows the expenditures for his line and is responsible for explaining any major discrepancies. What type of organizational structure does Eatsy use, and what kind of responsibility center does Manual manage?

Question

Quizplus · Accepted Answer

By allowing the managers of the responsibility centers to make decisions, the structure should be considered decentralized. Because Manuel is only responsible for the expenditures (costs), he manages a cost center.

Eatsy Manufacturing Creates a Master Budget That Includes Budgets for Each