Controllable Costs, as Used in a Responsibility Accounting System, Consist

question 78

Multiple Choice

Controllable costs, as used in a responsibility accounting system, consist of:

• A)only fixed costs.
• B)only direct materials and direct labour.
• C)those costs that a manager can influence in the time period under review.
• D)those costs about which a manager has some knowledge.
• E)those costs that are influenced by parties external to the organization.

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Definitions:

Contribution Margin

The selling price per unit minus the variable cost per unit, used to determine how sales affect net income.

Sales Projections

Estimates of the future sales revenue of a company, which are often based on historical sales data, market trends, and other relevant factors.

NPV

Net Present Value, a calculation used to determine the value of an investment by discounting future cash flows to their present value.

Payback Analysis

A financial analysis method used to determine the time required to recoup the cost of an investment or project.