Answer (D) is correct . The most desirable measure for evaluating a departmental manager is one that holds the manager responsible for the revenues and expenses (s)he can control. Controllability is the basic concept of responsibility accounting.
Answer (A) is incorrect because All variable costs may not be controllable, but some, if not all, fixed costs might be controllable.
Answer (B) is incorrect because Not all budgeted costs are controllable by managers.
Answer (C) is incorrect because All product costs may not be controllable, but some, if not all, period costs might be controllable.
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