Which of the Following Is Not True Regarding a Responsibility

question 143

Multiple Choice

Which of the following is not true regarding a responsibility accounting system?

• A)It is designed to measure the performance of managers in terms of controllable costs.
• B)It assigns responsibility for costs to the appropriate managerial level that controls those costs.
• C)It should not hold a manager responsible for costs over which the manager has no influence.
• D)It can be applied at any level of an organization.
• E)It is only relevant in manufacturing companies.

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Definitions:

Sunk Costs

Sunk costs are past expenditures that have already been incurred and cannot be recovered, and thus should not impact future decision-making.

Past Costs

Refers to expenses that have already occurred and cannot be recovered.

Marginal Costs

The supplementary cost that comes with producing an extra unit of a good or service.

Mass Affordability

The widespread ability of the average consumer to purchase goods and services, often due to lower prices or increased income levels.