Question

In each dropdown next to the following terms, select the identifying letter of its best description. Incurs costs without directly yielding revenues. Provides information used to evaluate the performance of a department. Costs incurred for the joint benefit of more than one department. Costs that a manager has the ability to affect. Holds manager responsible for revenues, costs and investments. Provides information to evaluate the performance of a department manager.

Answer 1

Cost center ⇒ Incurs costs without directly yielding revenues.

Investment center ⇒ Holds manager responsible for revenues, costs and investments.

Departmental accounting system ⇒ Provides information used to evaluate the performance of a department.

Indirect expenses ⇒ Costs incurred for the joint benefit of more than one department.

Controllable Cost ⇒ Costs that a manager has the ability to affect.

Responsibility accounting system ⇒ Provides information to evaluate the performance of a department manager.