Question

Choose the explanation that tells how the choice of the type of responsibility center​ (cost, revenue,​ profit, or​ investment) affects behavior.

A. The type of responsibility center determines the strategic plans for the organization.
B. The organization tailors​ it's long-range and​ short-range plans based on the goal of each responsibility center.
C. The type of responsibility center determines what the manager is accountable for and thereby affects the​ manager's behavior.
D. The choice of a responsibility center type guides the variables to be included in the budgeting exercise.
E. None of the above.
F. The type of responsibility center affects financial planning models.
G. These models affect the behavior of managers who aim to achieve a high profit and increase revenues.

Answer 1

Answer: C. The type of responsibility center determines what the manager is accountable for and thereby affects the​ manager's behavior.

Explanation: The choice of a type of responsibility center( cost profit, revenue or investment ) affects the manager's behavior and what the manager will be responsible for.

Also the choice of the responsibility center type can guide the variables to be included when budgeting.