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Match the Appropriate Definition a Through H with the Following

Question 98

Matching

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

Premises:

Responses:

Responsibility accounting system

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

Investment center

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

Cost center

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

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

Performance report

A measure of departmental sales less direct expenses.

Premises:

Responsibility accounting system

Investment center

Cost center

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.

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

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.

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

A measure of departmental sales less direct expenses.

Correct Answer:

Premises:

Responses:

Responsibility accounting system

Investment center

Cost center

Departmental contribution to overhead

Profit center

Performance report