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| 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.
