Financial & Managerial Accounting 17th Edition by Jan Williams ,Susan Haka,Mark Bettner,Joseph Carcello

Exercise 35

Evaluating Home Depot 's Responsibility Centersk
Consider the Home Depot "Five-Year Summary of Financial and Operating Results" shown at the end of Appendix A. Assume that Home Depot designates each of the countries in which it operates as an investment center (i.e., the United States with 1,976, Canada with 180, and Mexico with 100 stores respectively). In addition, assume each individual store is a profit center. Within each store, assume that inventory and janitorial are designated as cost centers. For each type of responsibility center described choose as many measures from those listed in the Five-Year Summary that seem appropriate to help evaluate the given center. Explain why the measures you have chosen are appropriate for the type of responsibility center (investment-country level, profit-store level, or cost center substore level).