In Preparing a Responsibility Income Statement That Shows Contribution Margin

question 4

Multiple Choice

In preparing a responsibility income statement that shows contribution margin and responsibility margin, two concepts are involved in allocating costs to the various centers. These concepts are:

• A) Whether the costs are variable or fixed and whether they are material in dollar amount.
• B) Whether the costs are traceable to the responsibility center and whether the responsibility center is organized as a profit center or an investment center.
• C) Whether the costs are variable or fixed and whether they are directly traceable to the responsibility center.
• D) Whether the costs are traceable to the responsibility center and whether they are material in dollar amount.

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Definitions:

Direct And Exact

Communication or information that is straightforward, clear, and precise, without ambiguity or evasion.

Concepts

Fundamental ideas or principles that form the basis of a topic, theory, or system.

Clichés

Clichés are phrases or expressions that have become overused to the point of losing their original meaning or effect, often considered as lacking in originality or creativity.

Buzzwords

Trendy words or phrases that are used to impress someone, often without conveying much substance.