_____ Is the Cost Needed to Own a Product,consisting of Initial

question 61

Multiple Choice

_____ is the cost needed to own a product,consisting of initial purchase cost and follow-up maintenance/service cost.

• A) Total cost of ownership 
• B) Price 
• C) Fixed cost 
• D) Cost-plus pricing

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Definitions:

Residual Income

The income that remains after deducting all required expenses and cost of capital from operating income.

Investment Centers

Segments within a company for which managers have responsibility over cost, revenue, and investment decisions.

Cost Center

A business segment whose manager has control over cost but has no control over revenue or investments in operating assets.

Responsibility Center

Any business segment whose manager has control over costs, revenues, or investments in operating assets.