A Responsibility Center Whose Manager Is Held Accountable for Both

question 16

True/False

A responsibility center whose manager is held accountable for both revenues and costs and for the resulting operating income is called a profit center.

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Definitions:

Paper Mills

Industrial facilities where raw materials like wood pulp are processed into paper and cardboard products.

Overapplied Manufacturing Overhead

A scenario in which the overhead costs assigned to manufacturing exceed the actual overhead expenses incurred.

Cost of Goods Sold

An expense measured and recorded on the income statement, representing the total cost of goods that were sold during a specified period.

Manufacturing Overhead Account

An account that tracks indirect production costs such as factory utilities, maintenance, and rent.