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Match the Appropriate Definition with the Following Terms

Question 60

Matching

Match the appropriate definition with the following terms:

Premises:

Responses:

Joint cost

A department or unit that generates revenues and incurs costs,in which the manager is also responsible for investments made in operating assets.

Direct expenses

Costs that are incurred for the joint benefit of more than one department and cannot be readily traced to only one department.

Cost center

A department that generates revenues and incurs costs.

Profit center

Costs for which a manager has the power to determine or at least significantly affect.

Investment center

A department or unit that incurs costs without directly generating revenues.

Indirect expenses

Costs incurred to produce or purchase two or more products at the same time.

Controllable costs

Costs readily traced to a specific department because they are incurred for the sole benefit of that department.

Premises:

Joint cost

Direct expenses

Cost center

Profit center

Investment center

Indirect expenses

Controllable costs

Responses:

A department or unit that generates revenues and incurs costs,in which the manager is also responsible for investments made in operating assets.

Costs that are incurred for the joint benefit of more than one department and cannot be readily traced to only one department.

A department that generates revenues and incurs costs.

Costs for which a manager has the power to determine or at least significantly affect.

A department or unit that incurs costs without directly generating revenues.

Costs incurred to produce or purchase two or more products at the same time.

Costs readily traced to a specific department because they are incurred for the sole benefit of that department.

Correct Answer:

Premises:

Responses:

Joint cost

Direct expenses

Cost center

Profit center

Investment center

Indirect expenses

Controllable costs