Item$4$

Part $4$ of $4$

$0\mathrm{.}25$

points

eBookPrintReferencesCheck my workCheck My Work button is now disabledItem $4$

Required information

Skip to question

Responsibility accounting systems provide information for evaluating the performance of department managers. A responsibility accounting system$$s performance reports for evaluating department managers should include only the expenses $($and revenues$)$ that each manager controls.

$-0$:$13$

$1$x

Knowledge Check $01$

Dave is the manager of the Software Sales Department. At the end of the year his department$$s income statement revealed his direct costs were over budget by $$25,000.$ The Director of Operations, Dave$$s boss, asks Dave to explain why he let the direct costs exceed budget. Which of the following is Dave$$s best response?

multiple choice

Dave should resign, because he is an ineffective manager.

Dave should point out that he is not in control of any of his department's direct costs.

Dave should ask that a responsibility accounting performance report be generated to determine whether the large unfavorable budget variances were within his control before proceeding with the discussion.

Dave should pursue a promotion because direct costs would have been even higher if not for his managerial prowess.