1. A segment of an organization is referred to as service center if it has

a. Responsibility for developing markets and selling the output of the organization

b. Responsibility for combining the raw materials, direct labor and other factors of production into a final output

c. Authority to make decisions affecting the major determinants of profit including the power to choose its markets and sources of supply

d. Authority to provide specialized support to other units within the organization

2. Responsibility accounting defines an operating center that is responsible for revenue and costs as a(n)

a. profit center

b. revenue center

c. division

d. operating unit

3. The basic purpose of a responsibility accounting system is

a. motivation

b. authority

c. variance analysis

d. budgeting

4. The segment margin of the Care Division of Learner Corporation should not include

a. Fixed selling expenses of the Care Division

b. Variable selling expenses of the Care Division

c. The Care Division's fair share of the salary of Learner Corporation's president

d. Net sales of the Care Division

5. When using a contribution margin format for internal reporting purposes, the major distinction between segment manager performance and segment performance is

a. Unallocated fixed cost

b. Direct variable costs of producing the product

c. Direct fixed cost controllable by the segment manager

d. Direct fixed cost controllable by others

6. A firm earning a profit can increase its return on investment by

a. increasing sales revenues and operating expenses by the same peso amount

b. ecreasing sales revenues and operating expenses by the same percentage

c. Increasing investment and operating expenses by the same peso amount

d. Increasing sales revenues and operating expenses by the same percentage