Responsibility Accounting Reports for a Profit Center Typically Show

question 108

Multiple Choice

Responsibility accounting reports for a profit center typically show

• A)revenues,expenses,and profit controlled by the manager of the center.
• B)only the controllable revenues.
• C)revenues,expenses,profit,and investment in assets controlled by the manager of the center.
• D)all revenues and expenses of the profit center.

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Definitions:

Marginal Cost

The cost added by producing one additional unit of a product, focusing on changes in overall cost with slight increases in production.

Sunk Costs

Costs that have already been incurred and cannot be recovered.

Marginal Analysis

The examination of the benefits and costs of an additional unit of consumption or production to make decisions on allocations of resources.

Risk Aversion

The behavior of preferring to avoid loss rather than making a gain, reflecting a preference for certainty over uncertainty.