In a Cost Center, the Manager Has Responsibility and Authority

question 50

Multiple Choice

In a cost center, the manager has responsibility and authority for making decisions that affect

• A) revenues
• B) investments in assets
• C) both costs and revenues
• D) costs

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Definitions:

Economists

Professionals who study, develop, and apply theories and concepts from economics to understand how economies function and how economic agents interact.

Average Total Cost

The total cost of production (fixed plus variable costs) divided by the number of units produced, indicative of the cost per unit of production.

Average Variable Cost

The per unit cost of production that varies with the level of output, including costs such as labor and materials.

Diminishing Returns

A principle stating that if one factor of production is increased while others are held constant, the overall returns will eventually decrease after a certain point.