In Responsibility Accounting, a Center's Performance Is Measured by Those

question 153

Multiple Choice

In responsibility accounting, a center's performance is measured by those costs which are controllable. Controllable costs are best described as including: (CMA adapted)

• A) direct materials and direct labor only.
• B) only those costs that the manager can influence in the current period.
• C) only discretionary costs.
• D) those costs about which the manager is knowledgeable and informed.

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Definitions:

Short-Term Lease

A lease agreement with a duration, typically less than a year, used for temporary asset usage.

Fixed Asset

A long-term tangible piece of property that a firm owns and uses in its operations to generate income.

Rent Expense

The cost incurred for leasing premises or equipment for business operations, typically recognized as an expense.

Liability

A financial obligation or amount owed by a business to another entity, typically categorized as current or long-term.