Asked by Betty ty_re on May 20, 2024
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A manager of a cost center is evaluated mainly on
A) the profit that the center generates.
B) his or her ability to control costs.
C) the amount of investment it takes to support the cost center.
D) the amount of revenue that can be generated.
Cost Center
A department or unit within an organization that does not directly generate revenue but incurs costs, used for budgeting and cost control.
Control Costs
Efforts and measures implemented to monitor and manage expenses to ensure they align with budgetary constraints and financial goals.
Cost Center Evaluation
The process of analyzing the performance and efficiency of a department or unit within an organization that does not directly generate revenue.
- Identify and interpret various types of responsibility centers (cost, profit, investment) along with their specific qualities.
- Gain insight into how responsibility accounting correlates with controllable margins and the evaluation of performance.
Verified Answer
Learning Objectives
- Identify and interpret various types of responsibility centers (cost, profit, investment) along with their specific qualities.
- Gain insight into how responsibility accounting correlates with controllable margins and the evaluation of performance.
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