In a Responsibility Accounting System

question 118

Multiple Choice

In a responsibility accounting system:

• A) Controllable costs are assigned to managers who are responsible for them.
• B) Each accounting report contains all items allocated to a responsibility center.
• C) Organized and clear lines of authority and responsibility are only incidental.
• D) All managers at a given level have equal authority and responsibility.
• E) All of these.

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Definitions:

Revenue and Spending Variance

The difference between the actual and budgeted figures for both revenue and expenses, indicating a company's financial performance.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels, allowing for better performance evaluation.

Food and Supplies

The consumable items and materials necessary for the operation of businesses involved in food service, hospitality, or healthcare, among others.

Spending Variance

The difference between the actual cost incurred for something and the expected cost according to a budget.