Responsibility Accounting Is a System That Measures the Results of Each

question 106

True/False

Responsibility accounting is a system that measures the results of each responsibility center and compares those results with some expected or budgeted outcome.

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Definitions:

Equivalent Units

A term in process costing used to convert partially completed units into a number of complete units for costing purposes.

Step-Down Method

An allocation method used in accounting to distribute costs among departments or products, starting with the department that provides the most services to others.

Service Department Costs

Expenses related to departments that support the production process but do not directly engage in manufacturing.

Operating Departments

Divisions or sections within a company that are directly involved in its core business operations, contributing to the production of goods or services.