What will you expect to find on a responsibility report for a profit centre?
A)only direct costs
B)no indirect fixed costs
C)all fixed costs-both controllable and non-controllable
D)controllable margin

Question

Quizplus · Accepted Answer

A responsibility report for a profit centre should include information on controllable margin, which essentially measures the profitability of the profit centre after deducting all of its controllable costs (both direct and indirect) from its revenue. Therefore, choice D is the best answer. Choices A and B are incorrect because they do not give a complete picture of the profit centre's performance, as they do not include all relevant costs. Choice C is partially correct, as it includes all fixed costs, but it does not differentiate between controllable and non-controllable fixed costs, which could lead to confusion regarding the profit centre's performance.

What Will You Expect to Find on a Responsibility Report