Identify Which of the Following Statements About Cost Centers and Decentralization

question 85

Multiple Choice

Identify which of the following statements about cost centers and decentralization is true.

• A)Accountability for revenues and expenses exists independently of the ability to make decisions.
• B)Accountability for revenues and expenses requires the ability to make decisions.
• C)Decentralized organizations are organized into profit centers.
• D)Cost centers are centralized, but profit centers are decentralized.

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Definitions:

FIFO Method

"First In, First Out" method of inventory valuation where the oldest inventory items are recorded as sold first, potentially impacting cost of goods sold and ending inventory valuation.

Equivalent Unit

A concept used in cost accounting to express the amount of materials, labor, and overhead costs assigned to finished units and units in progress as a total number of finished units.

Hybrid Costing System

A costing method that combines elements of both job costing and process costing systems, typically used for products that require a mix of standardized and customized production processes.

Labor Flow

This refers to the movement of employees or workforce within a company, industry, or between jobs, including their utilization and productivity.