Responsibility Accounting Performance Reports Are Prepared by Which Types of Business

question 38

Multiple Choice

Responsibility accounting performance reports are prepared by which types of business units?

• A) Cost centers only
• B) Investment centers and revenue centers only
• C) Cost centers, revenue centers, and profit centers
• D) Investment centers only

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Definitions:

Variable Costs

Expenses that change in proportion to the activity or volume of production in a business.

Rent

A payment made periodically by a tenant to a landlord in exchange for the use of land, a building, or other property.

Property Taxes

Taxes levied by local governments based on the assessed value of real estate property.

Monthly Profit

The total amount of income a business generates in a month after all expenses have been subtracted from total revenue.