Which of the Following Is True

question 58

Multiple Choice

Which of the following is true?

• A)The evaluation of performance should be based on both uncontrollable and controllable costs.
• B)Fewer costs become controllable as one moves up to each higher level of managerial responsibility.
• C)Fewer costs are controllable as one moves down to each lower level of managerial responsibility.
• D)Since a profit centre is an independent entity, all fixed costs are controllable by its manager.

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Definitions:

Standard

A level of quality or achievement, especially one that is used as a point of reference.

Budget

An estimation of revenue and expenses over a specified future period of time, used by organizations for planning and controlling their financial resources.

Standard Cost

A predetermined cost of manufacturing, selling, or administering each product or service, used as a benchmark to measure performance.

Financial Statements

Reports that provide an overview of a company's financial condition in both short and long term, including balance sheet, income statement, and cash flow statement.