A Manager of a Cost Center Is Evaluated Mainly on

question 49

Multiple Choice

A manager of a cost center is evaluated mainly on

• A) the profit that the center generates.
• B) his or her ability to control costs.
• C) the amount of investment it takes to support the cost center.
• D) the amount of revenue that can be generated.

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Definitions:

Production Decision

The process of determining what goods or services to produce, how much to produce, and how production resources are allocated.

Losses

Occurs when a company's expenses exceed its revenues during a specific period.

Competitive Price-Taker

A competitive price-taker is a firm or individual that has no control over market prices and must accept the prevailing market price as is.

Market Price

The current price at which a good or service can be bought or sold in a marketplace, determined by supply and demand dynamics.