Question

A manager in a cost center has responsibility for all of the following except a. fixed assets used in the cost center. b. salaries expense incurred by the cost center. c. direct labor incurred by the cost center. d. materials used or consumed in the cost center.

Answer 1

The correct answer is letter "A": fixed assets used in the cost center.

Step-by-step explanation:

A cost center is a unit of a company that does not contribute to generating profits but helps the firm by increasing quality service, for instance, which somehow helps the company in achieving other goals. Managers in cost centers are only in charge of limiting their expenses according to the budget of the company and are not involved in any revenue-related activity.

Fixed assets represent goods that the company owns from where it expects to generate profits. Therefore, managers of cost centers are not in charge of fixed assets.