Which of the Following Would Be Most Effective in a Small

question 3

Multiple Choice

Which of the following would be most effective in a small owner/manager-operated business?

• A) Profit centers
• B) Centralization
• C) Investment centers
• D) Cost centers

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Definitions:

Direct Labour Efficiency Variance

The difference between the budgeted amount of direct labor hours needed to produce a certain level of output and the actual hours used.

Cost Variances

Cost Variances are the differences between expected costs and actual costs incurred, analyzed in budgeting and accounting to control expenses.

Relative Size

An assessment of an entity's size compared to other entities in the same context, such as a company's market share relative to its competitors.

Recurring Variances

Variances that occur regularly or repeatedly over time, often indicating a systematic issue within a process or system.