To prepare for this Discussion, Cost, Profit, and Investment Centers, review the Portz & Lere article. Consider what you know from your professional background, the resources, research, and/or the regulatory environment in your home country.
Prepare the following:
Analyze how cost center accounting practices in German companies differ from the practices in your current or previous organization or one with which you are familiar.
Explain which country’s accounting practices you would prefer to use for your organization and why. Be sure to provide your rationale by using specific examples.
Provide an example of a profit center taken from your professional experience, the resources, or research. Explain why this is a profit center, including the methods of performance evaluation, and explain how it contributes to the success of the organization.
Provide an example of an investment center taken from your professional experience, the resources, or research. Explain why this is an investment center, including the methods of performance evaluation, and explain how it contributes to the success of the organization.
References
Zimmerman, J. L. (2011). Accounting for decision making and control (7th ed.). New York, NY: McGraw-Hill.
Chapter 5, Responsibility Accounting and Transfer Pricing (pp.170-228)
Portz, K., & Lere, J. C. (2010). Cost center practices in Germany and the United States: Impact of country differences on managerial accounting practices. American Journal of Business, 25(1), 45-52.
Sample Solution
