Skip to ContentGo to accessibility pageKeyboard shortcuts menu
OpenStax Logo
Principles of Accounting, Volume 2: Managerial Accounting

Why It Matters

Principles of Accounting, Volume 2: Managerial AccountingWhy It Matters
Picture of two people in a food truck serving a customer.
Figure 9.1 Food Trucks. Food trucks have grown significantly in popularity. They allow customers to try a variety of foods that are served quickly, and they often set up in locations that are convenient for customers. The mobility of food trucks adds another dimension that has broad appeal. (credit: modification of “Food Truck” by David Stanley/Wikimedia Commons, CC BY 2.0)

Chapter Outline

9.1 Differentiate between Centralized and Decentralized Management
9.2 Describe How Decision-Making Differs between Centralized and Decentralized Environments
9.3 Describe the Types of Responsibility Centers
9.4 Describe the Effects of Various Decisions on Performance Evaluation of Responsibility Centers

Lauren is a good cook who can make delicious meals quickly, and she enjoys cooking tremendously. Several friends have suggested she consider opening a food truck. She is intrigued by this idea and decides to further explore the possibility.

After several years of research and planning, Lauren opens her food truck and finds instant success. She is so busy that she decides to recruit several others to join her in her food truck business. While this is an exciting next step, she has some questions about expanding the food truck concept. In particular, she wants to know if she can grow the business while maintaining the level of quality in her food that has led to her success.

Since the concept of multiple food trucks is similar to the franchising concept, Lauren reaches out to a good friend who is the founder of a franchise that now has 10 regional locations. Her friend shares with her the concepts of a decentralized business and responsibility accounting. Under this approach, her friend tells her, she will be able to allow the individual food truck owners to have autonomy over their food truck while achieving the broader goals of financial success and serving quality food.

PreviousNext
Order a print copy
Citation/Attribution

This book may not be used in the training of large language models or otherwise be ingested into large language models or generative AI offerings without OpenStax's permission.

Want to cite, share, or modify this book? This book uses the Creative Commons Attribution-NonCommercial-ShareAlike License and you must attribute OpenStax.

Attribution information
  • If you are redistributing all or part of this book in a print format, then you must include on every physical page the following attribution:
    Access for free at https://openstax.org/books/principles-managerial-accounting/pages/1-why-it-matters
  • If you are redistributing all or part of this book in a digital format, then you must include on every digital page view the following attribution:
    Access for free at https://openstax.org/books/principles-managerial-accounting/pages/1-why-it-matters
Citation information

© Jul 16, 2024 OpenStax. Textbook content produced by OpenStax is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike License . The OpenStax name, OpenStax logo, OpenStax book covers, OpenStax CNX name, and OpenStax CNX logo are not subject to the Creative Commons license and may not be reproduced without the prior and express written consent of Rice University.