In Preparing a Responsibility Income Statement That Shows Contribution Margin

question 12

Multiple Choice

In preparing a responsibility income statement that shows contribution margin and responsibility margin,generally 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.

Reconcile total costs to account for in process cost summaries.

Understand the conceptual foundation and importance of cost accounting systems in both manufacturing and service firms.

Recognize the difference between job order costing and other costing methods, and identify situations where job order costing is most appropriate.

Comprehend the components and purpose of a job cost sheet and its relevance to both financial accounting and management.

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Definitions:

Cerebrovascular Accidents

Medical terminology for a stroke, where blood flow to a part of the brain is suddenly interrupted or reduced, causing brain damage.

Persistent Hypoxia

A condition where there is a consistently low level of oxygen in the tissues, which can lead to multiple system failure if not corrected.

Cardiac Defect

An abnormality in the structure of the heart that is present from birth, potentially affecting the walls, valves, arteries, or veins of the heart.

Bacterial Endocarditis

A serious condition involving the inflammation of the inner layers of the heart, often caused by bacterial infection.