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Match the Appropriate Definition a Through H with the Following

Question 119

Matching

Match the appropriate definition a through h with the following terms:

Premises:

Responses:

Cost center

A department whose manager is judged on the ability to control costs by keeping them within a satisfactory range.

Investment center

A measure of departmental sales less direct expenses.

Responsibility accounting system

A department whose manager is judged on the ability to generate revenues in excess of the department's costs.

Departmental contribution to overhead

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

Profit center

Set up to control costs and evaluate managers' performances by assigning costs to the managers responsible for controlling them.

Performance report

Compares actual and budgeted costs and expenses under the control of a manager.

Premises:

Cost center

Investment center

Responsibility accounting system

Departmental contribution to overhead

Profit center

Performance report

Responses:

A department whose manager is judged on the ability to control costs by keeping them within a satisfactory range.

A measure of departmental sales less direct expenses.

A department whose manager is judged on the ability to generate revenues in excess of the department's costs.

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

Set up to control costs and evaluate managers' performances by assigning costs to the managers responsible for controlling them.

Compares actual and budgeted costs and expenses under the control of a manager.

Correct Answer:

Premises:

Responses:

Cost center

Investment center

Responsibility accounting system

Departmental contribution to overhead

Profit center

Performance report