| Controllable costs | Costs that a manager has the power to control or at least strongly influence.
|
 |
|
|
| Cost center | Department that incurs costs but generates no revenues; common example is the accounting or legal department.
|
|
|
|
| Departmental accounting system | Accounting system that provides information useful in evaluating the profitability or cost effectiveness of a department.
|
|
|
|
| Departmental contribution to overhead | Amount by which a department's revenues exceed its direct expenses.
|
|
|
|
| Direct expenses | Expenses traced to a specific department (object) that are incurred for the sole benefit of that department.
|
|
|
|
| Indirect expenses | Expenses incurred for the joint benefit of more than one department (or cost object).
|
|
|
|
| Investment center | Center of which a manager is responsible for revenues, costs, and asset investments.
|
|
|
|
| Investment center return on total assets | Center net income divided by average total assets for the center.
|
|
|
|
| Profit center | Business unit that incurs costs and generates revenues.
|
|
|
|
| Responsibility accounting budget | Report of expected costs and expenses under a manager's control.
|
|
|
|
| Responsibility accounting performance report | (p.759) Responsibility report that compares actual costs and expenses for a department with budgeted amounts.
|
|
|
|
| Responsibility accounting system | System that provides information that management can use to evaluate the performance of a department's manager.
|
|
|
|
| Uncontrollable costs | Costs that a manager does not have the power to determine or strongly influence.
|