A responsibility centre:
A) refers to a unit of business where all the associated costs are considered as 'direct costs'.
B) refers to a unit of a business where the manager is held accountable for activities and performance.
C) is another term for 'business division'.
D) is a term applicable only to manufacturing companies.

Question

Quizplus · Accepted Answer

A responsibility center is a unit or department of a business where the manager is responsible and accountable for the activities, performance, and results of that unit. This may include financial performance, operational efficiency, and other key performance indicators. It is not directly related to whether the associated costs are considered as direct or indirect costs, nor is it limited to manufacturing companies. It is also different from a business division, which may encompass multiple responsibility centers.

A Responsibility Centre