Which of the following responsibility centres can be evaluated using residual income?
A) Profit centres
B) Revenue centres
C) Cost centres
D) Investment centres

Question

Quizplus · Accepted Answer

Residual income is a measure used to evaluate the performance of investment centres. It calculates the net operating income that an investment centre earns above the minimum required return on its operating assets. This method is not directly applicable to profit, revenue, or cost centres, as these do not typically involve assessments of returns on investment in the same way.

Which of the Following Responsibility Centres Can Be Evaluated Using