Responsibility margin is equal to:
A)Revenue,less contribution margin and traceable fixed costs.
B)Revenue,less variable costs.
C)Revenue,less variable costs and traceable fixed costs.
D)Revenue,less variable fixed costs,traceable fixed costs,and common costs.

Question

Quizplus · Accepted Answer

Responsibility margin is the amount of revenue remaining after subtracting the variable costs and traceable fixed costs associated with a particular responsibility center. Common costs are not included in the computation of responsibility margin because they cannot be directly traced to a particular center. Therefore, Choice C which includes revenue, less variable costs and traceable fixed costs is the correct answer.

Responsibility Margin Is Equal To