In a responsibility accounting system,costs are classified into categories on the basis of
A)fixed and variable costs.
B)prime and overhead costs.
C)administrative and nonadministrative costs.
D)controllable and noncontrollable costs.

Question

Quizplus · Accepted Answer

In a responsibility accounting system, costs are classified into categories based on whether they are controllable by the manager of a particular department or not. Controllable costs are the ones that the manager has the power to influence or affect, while non-controllable costs are those that are outside the manager's control. This classification helps in evaluating the performance of individual managers and their contribution to the organization's overall success. Therefore, choice D, i.e., controllable and non-controllable costs is the most appropriate answer.

In a Responsibility Accounting System,costs Are Classified into Categories on the Basis