Which Responsibility Center Managers Are Responsible for Both Generating Revenue

question 14

Multiple Choice

Which responsibility center managers are responsible for both generating revenue and either controlling costs or efficiently managing invested capital?

• A) cost and profit centers
• B) revenue and profit centers
• C) profit and investment centers
• D) revenue and investment centers

---

Definitions:

Markup

The amount added to the cost price of goods to cover overhead and profit, calculated as a percentage of the cost.

Predetermined Overhead Rate

A rate used to apply manufacturing overhead to products or job orders and is typically based on direct labor hours, direct labor costs, or machine hours.

Machine-Hours

A measure of production activity that quantifies the amount of time machines are used to produce goods.

Total Manufacturing Cost

The total expenses directly related to the manufacture of products, encompassing the price of raw materials, wages for direct labor, and indirect manufacturing costs.