In a responsibility accounting system, managers are accountable

In a responsibility accounting system, managers are accountable for
A. Variable costs but not for fixed costs.
B. Product costs but not for period costs.
C. Incremental costs.
D. Costs over which they have significant influence

Expert Answer

 

A = Variable costs but not for fixed costs.= In a responsibility accounting system, managers are responsible for the costs which they have to control whether expenses are fixed or variable So this option is not correct.

B = Product costs but not for period costs. = managers are responsible for the costs which they have to control, So Prodcust cost and period cost is not responsibilty of manager. So this optio is also not correct.

C = Incremental Costs: managers are responsible for the costs which they have to control, So increamental cost is not repsonsible of Manager and so this statement is wrong.

D = Costs over which they have significant influence: manager have significant influence means the manger are responsible for the cost which have he influence So this statement is correct.

Answer = Option D = Costs over which they have significant influence.

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