A Company Using Responsibility Accounting System Decides to Exclude All

question 172

Multiple Choice

A company using responsibility accounting system decides to exclude all uncontrollable costs from a manager's performance report. Jenson is the machine supervisor. Which of the following costs will impact Jenson's performance report?

• A) rent and taxes paid on by the company
• B) cost of materials used in manufacture
• C) direct labor cost
• D) cost of power consumed by the plant

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Definitions:

New Companies

Businesses that have been recently established or registered.

Supplemental Wages

Supplemental wages are additional income paid to an employee beyond their regular wages, including bonuses, commissions, overtime pay, and severance pay, which may be taxed differently.

FICA Taxes

Taxes imposed by the Federal Insurance Contributions Act, funding Social Security and Medicare, withheld from employees' paychecks and matched by employers.

Federal Withholding Taxes

Income taxes automatically deducted from an employee's paycheck by the employer, sent to the government as partial payment of the yearly tax obligation.