A Successful Responsibility Accounting Reporting System Is Dependent Upon (CMA

question 26

Multiple Choice

A successful responsibility accounting reporting system is dependent upon (CMA adapted) :

• A) The correct allocation of controllable variable costs.
• B) Identification of the management level at which all costs are controllable.
• C) The proper delegation of responsibility and authority.
• D) A reasonable separation of costs into their fixed and variable components since fixed costs are not controllable and must be eliminated from the responsibility report.

---

Definitions:

Competitive Price-searcher

An entity in a market that actively compares prices and seeks to set competitive prices for its products or services, acknowledging some level of market power.

Average Total Cost

The total cost of production divided by the total quantity produced, representing the cost per unit of output.

Marginal Revenue

The supplementary income generated by the sale of an extra unit of a product or service.

Market Entry

The process by which a company enters a new market, confronting challenges such as competition, legal requirements, and customer acquisition.