ACC650_T6.docx Problem 12-41 Designating Responsibility Centers and Problem 13-42 ROI a

ACC650_T6.docx    Problem 12-41 Designating Responsibility Centers and Problem 13-42 ROI and Residual Income  Grand Canyon University: ACC650  Problem 12-41 Designating Responsibility Centers  To: Waikiki Sands Hotel General Manager  From: Samantha Langevin, Consultant  Subject: Responsibility-center Designation  First and foremost, it is vital to understand responsibility accounting and what a responsibility center is. Responsibility accounting refers to the various concepts and tools used by managers to measure the performance of people and departments in order to foster goal congruence (Hilton, 2016, pg. 540). As for a responsibility center, it can be defined as a subunit in an organization whose manager is held accountable for specified financial results of the subunits activities (Hilton, 2016, pg. 540). Responsibility centers have four common types, which are as follows: Cost Center, Revenue Center, Profit Center, and Investment Center(Hilton, 2016, pg. 540).  The Waikiki Sands Hotel is a subunit of the Aloha Hotels and Resorts, Inc. As a subunit the Waikiki Sands Hotel is considered a profit center. A profit center is an organizational subunit that is responsible for costs and revenues, but not investments in assets("Maintaining Control Over Decentralized Organizations," n.d.).The investment center in this organization would be Aloha Hotels and Resorts, Inc. This is the organizational subunit that is responsible for the cost, revenues, and investments in assets for the organization