A Multidivisional Corporation Like GE Would Tend to Use What

question 4

Multiple Choice

A multidivisional corporation like GE would tend to use what type of responsibility center?

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

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Definitions:

Explicit Costs

Direct, out-of-pocket expenses paid by firms for inputs to production, such as wages, rent, and materials, as opposed to implicit costs which are not directly paid out in cash.

Implicit Costs

The opportunity costs that are not directly paid for or incurred during the production of a good or service.

Average Total Cost

The complete expenditure of manufacturing (incorporating steady and fluctuating expenses) divided by the aggregate volume of goods produced.

Output

The total quantity of goods or services produced by a company, sector, or economy within a given period.