Halpern Corporation is in the process of overhauling the performance evaluation system for its San Diego manufacturing division, which produces and sells parts that are popular in the aerospace industry.Which of the following classiﬁcations is least ely to be chosen to evaluate the overall operations of the San Diego division?
A)Cost center.
B)Responsibility center.
C)Proﬁt center.
D)Investment center.
E)The proﬁt center and investment center are equally unlikely to be chosen.

Question

Quizplus · Accepted Answer

A cost center is typically used to evaluate departments or units whose primary function is to incur expenses rather than generate revenue or profit. Since the San Diego division produces and sells products, it is less likely to be classified as a cost center. The more likely classifications would be responsibility center, profit center, or investment center, depending on the level of autonomy and decision-making authority given to the division. The answer E is also incorrect since it assumes that both profit center and investment center are equally unlikely, whereas one of them could be a more appropriate classification depending on the circumstances.

Halpern Corporation Is in the Process of Overhauling the Performance