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Match the Following Terms with the Appropriate Definition

Question 16

Matching

Match the following terms with the appropriate definition

Premises:

Responses:

Investment center

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

Performance report

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

Cost center

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

Departmental contribution to overhead

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

Profit center

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

Responsibility accounting system

A measure of departmental sales less direct expenses.

Premises:

Investment center

Performance report

Cost center

Departmental contribution to overhead

Profit center

Responsibility accounting system

Responses:

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.

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.

Correct Answer:

Premises:

Responses:

Investment center

Performance report

Cost center

Departmental contribution to overhead

Profit center

Responsibility accounting system