In Preparing an Income Statement That Measures Contribution Margin and Responsibility

question 47

Multiple Choice

In preparing an income statement that measures contribution margin and responsibility margin for a responsibility center, two concepts are applied in classifying costs. One is whether the costs are variable or fixed. The other is whether the costs are:

• A) Product costs or period costs.
• B) Traceable to the responsibility center.
• C) Under the control of the manager.
• D) Transfer prices.

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Definitions:

Depressant

A class of drugs that reduce the functionality of the nervous system, leading to decreased arousal or stimulation in areas of the brain.

Narcotic

A class of drugs that reduce pain, induce sleep, and may alter mood or behavior; often used medicinally but can lead to dependency.

Narcotic

traditionally refers to substances that induce sleep or stupor, particularly opioids, which are also used for pain relief.

Heroin

An opioid drug derived from morphine, highly addictive and used illicitly for its euphoric effects.