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Match the Following Terms with the Appropriate Definition

Question 138

Matching

Match the following terms with the appropriate definition

Premises:

Responses:

Direct expenses

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

Profit center

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

Controllable costs

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

Indirect expenses

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

Cost center

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

Joint cost

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

Investment center

A department that generates revenues and incurs costs.

Premises:

Direct expenses

Profit center

Controllable costs

Indirect expenses

Cost center

Joint cost

Investment center

Responses:

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

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.

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

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

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

A department that generates revenues and incurs costs.

Correct Answer:

Premises:

Responses:

Direct expenses

Profit center

Controllable costs

Indirect expenses

Cost center

Joint cost

Investment center