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

Question

Quizplus · Accepted Answer

Residual income is a measure of the profitability of an investment centre. Therefore, only investment centres can be evaluated using residual income. Cost centres only have costs, revenue centres only generate revenue, and profit centres are evaluated based on profit margin.

Which of the Following Responsibility Centres Can Be Evaluated Using