Matching
Select the term from the list that best matches the description or definition.
Premises:
Practice of holding a manager responsible for revenue and expense items over winch he or she exercises predominant control
Type of responsibility center where the manager influences only costs and is held accountable for a specific output at a given level of cost
Measure of the ability of a firm or segment within a firm to utilize available resources effectively to generate a positive return for shareholders
Transfer price based on the external market price less any cost savings
Situation that motivates a manager to act in his or her own best interest even though the corporation as a whole may suffer
The point in an organization where the control over revenue or expense items is located
Transfer price that is based on the historical or standard cost incurred by the supplying segment
Type of responsibility center where the manager can influence revenues expenses, and capital invested in his or her center to attain the best performance possible
Type of responsibility center where the manager can influence both revenues and expenses for his or her center
Approach that evaluates a manager on his or her ability to maximize the dollar value of earnings above some targeted level of earnings
Reports comparing budgeted and actual controllable costs for each center within a firm
When variances from the budget are emphasized in reporting procedures so that management concentrates its attention on those variances from the budget
Transfer price that is established by agreement of both the selling and buying segments of the firm
Practice of delegating authority and responsibility for the operation of business segments
Responses:
Controllability concept
Cost-based transfer price
Cost center
Decentralization
Investment center
Management by exception
Market-based transfer price
Negotiated transfer price
Profit center
Residual income
Responsibility center
Responsibility reports
Return on investment
Suboptimization
Correct Answer:
Premises:
Responses:
Practice of holding a manager responsible for revenue and expense items over winch he or she exercises predominant control
Type of responsibility center where the manager influences only costs and is held accountable for a specific output at a given level of cost
Measure of the ability of a firm or segment within a firm to utilize available resources effectively to generate a positive return for shareholders
Transfer price based on the external market price less any cost savings
Situation that motivates a manager to act in his or her own best interest even though the corporation as a whole may suffer
The point in an organization where the control over revenue or expense items is located
Transfer price that is based on the historical or standard cost incurred by the supplying segment
Type of responsibility center where the manager can influence revenues expenses, and capital invested in his or her center to attain the best performance possible
Type of responsibility center where the manager can influence both revenues and expenses for his or her center
Approach that evaluates a manager on his or her ability to maximize the dollar value of earnings above some targeted level of earnings
Reports comparing budgeted and actual controllable costs for each center within a firm
When variances from the budget are emphasized in reporting procedures so that management concentrates its attention on those variances from the budget
Transfer price that is established by agreement of both the selling and buying segments of the firm
Practice of delegating authority and responsibility for the operation of business segments
Premises:
Practice of holding a manager responsible for revenue and expense items over winch he or she exercises predominant control
Type of responsibility center where the manager influences only costs and is held accountable for a specific output at a given level of cost
Measure of the ability of a firm or segment within a firm to utilize available resources effectively to generate a positive return for shareholders
Transfer price based on the external market price less any cost savings
Situation that motivates a manager to act in his or her own best interest even though the corporation as a whole may suffer
The point in an organization where the control over revenue or expense items is located
Transfer price that is based on the historical or standard cost incurred by the supplying segment
Type of responsibility center where the manager can influence revenues expenses, and capital invested in his or her center to attain the best performance possible
Type of responsibility center where the manager can influence both revenues and expenses for his or her center
Approach that evaluates a manager on his or her ability to maximize the dollar value of earnings above some targeted level of earnings
Reports comparing budgeted and actual controllable costs for each center within a firm
When variances from the budget are emphasized in reporting procedures so that management concentrates its attention on those variances from the budget
Transfer price that is established by agreement of both the selling and buying segments of the firm
Practice of delegating authority and responsibility for the operation of business segments
Responses:
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