Chapter 24 Performance Measurement
and Responsibility Accounting
questions with answers.
Decentralized organizations ANS -Organization in which decision-making authority is held by the
managers who are closest to the operating activities.
Cost Center ANS -The business segment that incurs costs but that does not directly generates revenue.
Profit Center ANS -A responsibility center that incurs costs and also generates revenues.
Investment Center ANS -A business segment whose manager has control over cost, revenue, and
investments in operating assets.
Responsibility Accounting System ANS -a system for evaluating the performance of each responsibility
center and its manager
Controllable Costs ANS -costs that a manager has the power to control or at least strongly influence
Uncontrollable Costs ANS -Costs that a manager does not have the power to determine or strongly
influence.
Responsibility Accounting Budgets ANS -Budget that uses the concept of controllable costs to assign
managers the responsibility for costs and expenses under their control
Responsibility Accounting Performance Report ANS -System that reports actual expenses that a
manager is responsible for and their budgeted amounts.
departmental contribution to overhead ANS -Report of Sales less Direct Expenses
and Responsibility Accounting
questions with answers.
Decentralized organizations ANS -Organization in which decision-making authority is held by the
managers who are closest to the operating activities.
Cost Center ANS -The business segment that incurs costs but that does not directly generates revenue.
Profit Center ANS -A responsibility center that incurs costs and also generates revenues.
Investment Center ANS -A business segment whose manager has control over cost, revenue, and
investments in operating assets.
Responsibility Accounting System ANS -a system for evaluating the performance of each responsibility
center and its manager
Controllable Costs ANS -costs that a manager has the power to control or at least strongly influence
Uncontrollable Costs ANS -Costs that a manager does not have the power to determine or strongly
influence.
Responsibility Accounting Budgets ANS -Budget that uses the concept of controllable costs to assign
managers the responsibility for costs and expenses under their control
Responsibility Accounting Performance Report ANS -System that reports actual expenses that a
manager is responsible for and their budgeted amounts.
departmental contribution to overhead ANS -Report of Sales less Direct Expenses
