Chapter 22 Flashcards
Incurs costs without directly generating revenues
Cost center
Examples of a ________ ________ include: manufacturing dept., service departments like accounting, advertising, and purchasing
cost center
Incurs costs and generates revenues
Profit center
Incurs costs and generates revenues; is responsible for effectively using center assets
Investment centers
A cost is ________ if a manager has the power to determine or at least significantly affect the amount incurred.
controllable
_________ costs are not within the manager’s control or influence.
uncontrollable
Responsibility accounting system, evaluating cost center performance
Cost centers
Direct and indirect expenses, allocation of indirect expenses, departmental income statements, departmental contribution to overhead
Profit centers
Financial performance measures, non financial performance measures, transfer pricing
Investment centers
When evaluating managers’ performances, we should use data reflecting their departments’ outputs along with their _________ _______ and expenses.
controllable costs
Accumulates and reports costs and expenses that a manager is responsible for and their budgeted amounts
Responsibility accounting performance report
Costs that are incurred for the joint benefit of more than one department and cannot be readily traced to only one department
Indirect expenses
Indirect expenses are typically considered _________ costs when evaluating a department managers’ performance.
uncontrollable
If employees work for the benefit of more than one department, their wages are indirect expenses and must be ________ across the departments benefited
allocated
Depreciation on equipment and machinery used by more than one department is an ________ expense to be allocated across departments.
indirect
