Prentiss Company is decentralized with three divisions.While all three division managers have responsibility for costs,only the Division Three manager has responsibility for generating revenues.Select the correct statement from the following.
A) Prentiss Company is not large enough to benefit from preparing responsibility reports.
B) Responsibility reports should be prepared for Division Three only.
C) Responsibility reports should be prepared for all three divisions.
D) Responsibility reports should be prepared for Divisions One and Two only.

Question

Quizplus · Accepted Answer

Since all three division managers have responsibility for costs, it is important to prepare responsibility reports for all the divisions. Additionally, even though only Division Three has responsibility for generating revenues, it is still important to prepare responsibility reports for Divisions One and Two to measure their performance and compare it to the performance of Division Three. Therefore, responsibility reports should be prepared for all three divisions.

Prentiss Company Is Decentralized with Three Divisions