Asked by Ifunanya Anumba on Mar 10, 2024
Verified
Classifying responsibility centre costs as controllable or uncontrollable can enhance:
A) performance evaluation.
B) cost accounting.
C) budget reporting.
D) financial reporting.
Responsibility Centre
A unit within an organization, such as a department or division, whose manager is accountable for specific financial and operational outcomes.
Controllable
Refers to costs or factors within a business that can be managed or influenced by decisions made by the company.
Uncontrollable
A term referring to factors or costs that cannot be directly controlled or influenced by decisions in the short term.
- Recognize the importance of classifying costs for performance evaluation, budgeting, and financial management.
Verified Answer
JT
Julian TruittMar 10, 2024
Final Answer :
A
Explanation :
Classifying responsibility centre costs as controllable or uncontrollable can enhance performance evaluation by allowing managers to be evaluated on the costs that they have direct control over. This helps to provide a more accurate assessment of a manager's performance and can improve decision-making processes.
Learning Objectives
- Recognize the importance of classifying costs for performance evaluation, budgeting, and financial management.