A boutique hotel is in the process of upgrading all of its systems including its management control system. Since its inception, the hotel has employed a centralized system, but the hotel has grown enough to consider decentralization. Of the following units or departments, which would be considered a cost center for the boutique hotel?
A) Food and beverages department
B) The gift shop
C) The hotel bar
D) The housekeeping department

Question

Quizplus · Accepted Answer

This question requires familiarity with responsibility centers and how the types of centers are different from one another. A cost center will incur costs and is measured on its ability to manage its expenses while also controlling certain nonfinancial metrics. Choice D is the only choice listed that is a true cost center. Choices A, B, and C all represent other types of centers.

A Boutique Hotel Is in the Process of Upgrading All