Chapter 9 Multiple Choice:
1.It is a subdivision of managerial accounting which relates reporting or performance
directly with the person who has the responsibility for its control. It is useful in assessing
the performance of persons responsible for controlling costs, revenues, or invested
capital and analyzing deviations from planned and prior performance.
a.Accounting systems design and installation
b. Cost accounting
c.Standard cost accounting
d.Responsibility accounting
2.It relates accounting to the budgetary system, thus acting as a control device.
Management reports give details of budgeted and actual performances and show
responsibilities at all levels of management.
a.Programmingc. Responsibility accounting
b.Accounting system d. Budgeting
3.Which of the following statements is correct?
a.The direct cost of a particular department is always a controllable cost.
b.Responsibility accounting identifies cost, revenues and even capital investments with
individuals, e.g., managers, and thus provides for more control and evaluation of
performance.
c.All managers within an organization have equal authority and responsibility
d.Internal reports prepared under the responsibility accounting system should be
limited to only variable manufacturing costs.
4.B Company uses an accounting system that charges costs to the manager who has
been given the authority to make the decisions regarding the incurrence of such costs.
For example, if the Production manager was not able to monitor the efficiency of the
workers in his department, so that he was forced to ask them to work overtime to finish a
specific job on time, the additional cost of working overtime is charged to such Manager
or his department. This type of accounting system is known as
a.Transfer price accountingc. functional accounting
b.Responsibility accountingd. cost accounting
5.In a responsibility accounting system, costs are classified as controllable and non-
controllable costs, which imply that some revenues and costs can be changed through
effective management. Controllable costs can be described as including
a.Discretionary costs only
b.Prime costs only
c.Only those costs that the manager can influence in the current time period
d.All the costs that are directly traceable to the responsibility center
6.The basic purpose of responsibility accounting is
a.Motivationc. authority
b.Variance analysisd. budgeting
MULTIPLE CHOICE QUESTIONS
1.When managers of subunits throughout an organization strive to achieve the goals set by top
management, the result is:
A.goal congruence.
B.planning and control.
C.responsibility accounting.
D.delegation of decision making.
E.strategic control.
Answer: A LO: 1 Type: RC
2.Which of the following is not an example of a responsibility center?
A.Cost center.
B.Revenue center.
C.Profit center.
D.Investment center.
E.Contribution center.
Answer: E LO: 2 Type: RC
3. A manufacturer's raw-material purchasing department would likely be classified as a:
A.cost center.
B.revenue center.
C.profit center.
D.investment center.
E.contribution center.
Answer: A LO: 2 Type: N
4.Hitchcock Corporation is in the process of overhauling the performance evaluation system for
its Los Angeles manufacturing division, which produces and sells parts that are popular in the
aerospace industry. Which of the following is least likely to be chosen to evaluate the overall
operations of the Los Angeles division?
A.Cost center.
B. Responsibility center.
C.Profit center.
D.Investment center.
E.The profit center and investment center are equally unlikely to be chosen.
Answer: A LO: 2 Type: N
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