ECONOMICS

Detailed explanation-1: -Answer: An investment centerA segment of an organization responsible for costs, revenues, and investments in assets. is an organizational segment that is responsible for costs, revenues, and investments in assets. Investment center managers have control over asset investment decisions.

Detailed explanation-2: -When one entity purchases goods from another entity under the same ownership, a sales price is charged, just as it would be to an outside customer. This price is called the transfer price. In this case, the sale is made to another entity as part of the production process rather than to the end-user.

Detailed explanation-3: -ROI increases because average operating assets is in the denominator of ROI. Residual income increases when average operating assets decreases because a reduction in the average operating assets results in a reduction of the required return.

Detailed explanation-4: -The production department protests that additional overtime costs will be incurred as a result of the order. The sales department argues that the order is from an important customer. The production department processes the order.