Effective Writing 10th Edition by Claire May,Gordon May

Exercise 10

You are a staff accountant for Mitchell Manufacturing, Inc., a large electronics manufacturing company. Mitchell has four sales divisions, three manufacturing plants, and a home office in Dearborn, Michigan, which houses all the administrative offices. Management is considering employing responsibility accounting methods for the first time. Jeff Smart, Chief Operating Officer of Mitchell, has asked you to answer the following questions in a memo:
• What is responsibility accounting?
• How might Mitchell Manufacturing employ responsibility accounting for control and management evaluation purposes?
• Assuming responsibility accounting techniques are used, are there any precautions that should be taken to ensure that the techniques are used properly? If so, what are they?
Write a memo to Mr. Smart containing the answers to these questions.