In a Profit Center, the Department Manager Has Responsibility for and the Authority

question 207

Multiple Choice

In a profit center, the department manager has responsibility for and the authority to make decisions that affect

• A) not only costs and revenues, but also assets invested in the center
• B) the assets invested in the center, but not costs and revenues
• C) both costs and revenues for the department or division
• D) costs and assets invested in the center, but not revenues

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Definitions:

Marginal Cost

An elevation in the cumulative expense resulting from manufacturing one more unit of a product or service.

Deadweight Loss

A decrease in economic efficiency resulting from the failure to reach equilibrium in the market for a good or service.

Monopolies

Market structures characterized by a single seller who controls the market supply of a good or service and can influence the price.

Efficiency

The optimal allocation of resources to maximize desired outputs without wasting any input.