Which of the Following Statements About Responsibility Accounting Is True

question 164

Multiple Choice

Which of the following statements about responsibility accounting is true?

• A) Managers should be held responsible for all price variances that occur within their department.
• B) Managers should be held responsible for all revenues and costs that occur within their department.
• C) Managers should be responsible for all investment decisions that occur within their department.
• D) Managers should be held responsible for only those things under their control.

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Definitions:

Marginal Utility

Marginal Utility represents the additional satisfaction or utility a consumer gains from consuming one more unit of a good or service.

Diminishing Marginal Utility

A principle stating that as a person increases consumption of a product, there is a decline in the satisfaction or utility they derive from each additional unit.

Utility Maximization

The economic principle that individuals seek to obtain the greatest possible satisfaction from their consumption choices, given their income and prices.

Marginal Utility Per Dollar

A measure of the additional satisfaction gained from spending one more dollar on a good or service.