Answer (D) is correct . A cost center is a responsibility center that is accountable only for costs. The cost center is the least complex type of segment because it has no responsibility for revenues or investments.
Answer (A) is incorrect because A profit center is a segment responsible for both revenues and costs. A profit center has the authority to make decisions concerning markets and sources of supply.
Answer (B) is incorrect because An investment center is a responsibility center that is accountable for revenues (markets), costs (sources of supply), and invested capital.
Answer (C) is incorrect because A contribution center is responsible for revenues and variable costs, but not invested capital.
|
