Responsibility Accounting Systems Strive To

question 58

Multiple Choice

Responsibility accounting systems strive to:

• A) place blame on guilty individuals.
• B) provide information to managers.
• C) hold managers accountable for both controllable and noncontrollable costs.
• D) identify unfavorable variances.
• E) provide information so that managers can make decisions that are in the best interest of their individual centers rather than in the best interests of the firm as a whole.

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Definitions:

Interest-Rate Cost-Of-Funds

The cost incurred by financial institutions to borrow funds, which influences the interest rates they charge for loans and mortgages.

Perfectly Elastic

A situation in market economics where the quantity demanded or supplied of a good changes infinitely in response to any change in price.

Market Interest Rates

The prevailing rates at which borrowers can obtain loans and lenders can offer loans in the financial market, depending on supply and demand dynamics.

Inverted-U Theory

A theory suggesting that there is an optimal level of certain factors (such as stress or creativity) beyond which performance or efficiency begins to decline.