Select the Term from the List That Best Matches the Description

Select the term from the list that best matches the description or definition. Enter the number of the best answer in "Your Answer" column. $\begin{array}{|l|l|l|}\hline \text { Your Answer } & \text { Definition or Description } & \text { Term } \\\hline & \begin{array}{l}\text { A. Practice of holdung a manager respons ible for revenue and } \\\text { expense items over which he or she exercises predominant control }\end{array} & \text { 1. Controllablity concept } \\\hline & \begin{array}{l}\text { B. Type of responsbility center where the manager influences only } \\\text { costs and is held acconntable for a specific output at a given level } \\\text { of cost }\end{array} & \text { 2. Cost-based transfer price } \\\hline & \begin{array}{l}\text { C. Measure of the ability of a firm or segment within a firm to } \\\text { utilize avalable resources effectrvely to generate a positive retrun } \\\text { for shareholders }\end{array} & \text { 3. Cost center } \\\hline & \begin{array}{l}\text { D. Transfer price based on the external market price less any cost } \\\text { savings }\end{array} & \text { 4. Decentralization } \\\hline & \begin{array}{l}\text { E. Situation that motivates a manager to act in his or her own best } \\\text { nterest even thongh the corporation as a whole may suffer }\end{array} & \text {. Investment center } \\\hline & \begin{array}{l}\text { F. The point in an organization where the control over reveme of } \\\text { expense items is located }\end{array} & \text { Management by exception } \\\hline & \begin{array}{l}\text { G. Transfer price that is based on the histonical or standard cost } \\\text { incured by the supplying segment }\end{array} & \text { 7. Market-based transfer price } \\\hline & \begin{array}{l}\text { H. Type of responsibility center where the manager can influence } \\\text { revemues, expenses, and capital invested in his or her center to } \\\text { attain the best performance possible }\end{array} & \text { 8. Negotinted transfer price } \\\hline & \begin{array}{l}\text { I. Type of responsibility center where the manager can influence } \\\text { both reverues and expenses for lis or her center }\end{array} & \text { 9. Profit center } \\\hline & \begin{array}{l}\text { J. Approach that evahates a manager on his or her ability to } \\\text { maxinize the dolbr valne of earnings above some targeted level of } \\\text { earnings }\end{array} & \text { 10. Residual income } \\\hline & \begin{array}{l}\text { K. Reports comparing bodgeted and actnal controllable costs for } \\\text { each center within a firm }\end{array} & \text { 11. Responsibulity center } \\\hline & \begin{array}{l}\text { L. When variances from the budget are emphasized in reporting } \\\text { procedures so that managenent concentrates its attention on those } \\\text { variances from the budget }\end{array} & \text { 12. Responsibility reports } \\\hline & \begin{array}{l}\text { M. Transfer price that is established by agreement of both the } \\\text { selling and buying segnents of the firm }\end{array} & \text { 13. Return on investment } \\\hline & \begin{array}{l}\text { N. Practice of delegating authority and responsibility for the } \\\text { geeration of bnsiness segments }\end{array} & \text { 14. Suboptimization } \\\hline\end{array}$