In a Cost Center, the Manager Has Responsibility and Authority

question 102

Multiple Choice

In a cost center, the manager has responsibility and authority for making decisions that affect:

• A) revenues
• B) assets
• C) both costs and revenues
• D) costs

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Definitions:

Cost Formula

A mathematical equation used to predict the total cost of production or operations, incorporating both fixed and variable costs.

Total Cost

Encompasses all expenses associated with producing or acquiring goods and services, including direct, indirect, fixed, and variable costs.

Activity Level

The volume of production or the degree of services provided, which impacts the variable costs and sometimes the efficiency in a business.

Fixed Manufacturing

Costs in manufacturing that do not vary with the level of production, such as rent, salaries, and insurance.