Chapter 24, Problem 4QS

Allocation and measurement terms

C1

In each blank next to the following terms, place the identifying letter Of its best description.

_________1. Cost center

_________2. Investment center

_________3. Departmental accounting system

_________4. Operating department

_________5. Profit center

_________6. Responsibility accounting system

_________7. Service department

A. Incurs costs without directly yielding revenues.

B. Provides information used to evaluate the performance of a department.

C. Holds manager responsible for revenues, costs, and investments.

D. Engages directly in manufacturing or in making sales directly to customers.

E. Does not directly manufacture products but contributes to profitability of the entire company.

F. Incurs costs and also generates revenues.

G. Provides information used to evaluate the performance of a department manager.