The responsibility margin is calculated by:
A)Subtracting fixed costs traceable to a center from its contribution margin.
B)Subtracting common fixed costs from the contribution margin.
C)Subtracting variable costs from sales.
D)Subtracting common fixed costs from variable costs.

Question

Quizplus · Accepted Answer

The responsibility margin is calculated by subtracting fixed costs that are traceable to a center from its contribution margin. This helps in evaluating the performance of a profit or investment center by considering only the revenues and costs directly under the control of the center's manager.

The Responsibility Margin Is Calculated By