The manager of a profit centre should not be responsible for which of the following types of decisions?
A) Deciding which supplier should be used for the purchase of direct materials.
B) Establishing the number of employees that will need to work each day.
C) Deciding whether or not their segment should purchase additional machinery.
D) Deciding whether or not to accept a special order from a customer.

Question

Quizplus · Accepted Answer

The manager of a profit centre is typically responsible for decisions that affect the revenue and costs directly related to their segment's operations. Decisions about capital investments, such as purchasing additional machinery, usually fall under the purview of higher management levels because they involve long-term financial commitments and strategic planning beyond the scope of day-to-day operations and profit generation.

The Manager of a Profit Centre Should Not Be Responsible