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What type of responsibility center design you recommend

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Question: Kraxton Chemie Company consists of seven divisions. Divisions One through Five make products that are sold in the competitive market. Divisions Two and Three make their own investment and transfer pricing decisions. Twenty-five percent of Division Two's output is devoted to a component that is transferred to Division Three as part of the subassembly of Division Three's main product. Divisions Six and Seven provide services to the other divisions. Eighty percent of Division Six's output is environmental cleanup services provided to Divisions One and Two. The remaining 20 percent is sold to external customers. Finally, Division Seven is devoted to R&D activities that support the entire company.

What type of responsibility center design would you recommend for Kraxton Chemie Company?

Reference no: EM132773010

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