A Responsibility Center Which Measures Resources in Dollars Without Consideration

question 27

Multiple Choice

A responsibility center which measures resources in dollars without consideration of service or product costs is called a(n)

• A) investment center.
• B) revenue center.
• C) expense center.
• D) profit center.
• E) standard cost center.

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Definitions:

Direct Departmental Expenses

Costs that can be directly attributed to a specific department within an organization, such as salaries of departmental staff.

Indirect Expenses

Expenses that are not directly tied to the production of goods or services, such as administrative and marketing costs.

Contribution Margin

The amount remaining from sales revenue after variable costs are deducted, contributing to covering fixed costs and generating profit.

Contribution Margin

The amount remaining from sales revenue after all variable expenses have been deducted, indicating how much revenue is contributing to fixed costs and profits.