Which of the following responsibility centers will use a segmented income statem

Question

Which of the following responsibility centers will use a segmented income statement as an evaluation tool?

cost center

revenue center

profit center

Which of the following statements follows from the controllability principle?

A profit center manager should be evaluated based on residual income, not return on investment.

An investment center manager should be evaluated based on return on investment, not residual income.

A profit center manager should be evaluated based on segment margin, not profit margin.

A cost center manager should be evaluated on costs and revenues, not just costs.

balanced center

Explanation / Answer

Ans 1profit center will use a segmented income statement as an evaluation tool

Ans2

A profit center manager should be evaluated based on segment margin, not profit margin follows from the controllability principle

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