Concept explainers
a
Introduction:
The responsibility report compares the actual cost with the budgeted ones to evaluate the performance of the manager of a cost center. It represents the statement of controllable costs related to a particular unit or division.
To prepare: The Report D.
b
Introduction:
The responsibility report represents the statement prepared at each level of management. It reflects the standard and actual controllable costs being incurred during the period.
To prepare: Report C.
c
Introduction:
Management at each level and department of the organization prepares a statement that reflects the efficiency in controlling the cost incurred in their respective department. Report B is usually prepared by the vice president. This report states the total costs being incurred in all the divisions of the organization.
To prepare: Report B.
d
Introduction:
Report A represents the responsibility report prepared by the president. This report includes all the total costs incurred in each department of the company. It helps in determining the overall efficiency of the company in controlling the cost.
To prepare: Report A.
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