A Principle of Responsibility Accounting Is That Managers Are Responsible

question 29

True/False

A principle of responsibility accounting is that managers are responsible for controllable and uncontrollable costs.

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Definitions:

Break-even Sales

The amount of revenue required to cover total costs, both fixed and variable, with no profit or loss.

Fixed Expenses

Fixed costs, encompassing rent, salaries, and insurance, that are unaffected by changes in production or sales activity.

Operating Period

The length of time during which a business or a project is expected to operate or carry out its primary operations.

Break-even Sales

The amount of revenue needed to cover all fixed and variable costs, resulting in zero net profit or loss.