Select the term from the list of terms that best matches the descriptions provided. Term 1. 2. Descriptions Practice of holding a manager responsible for revenue and expense items over which he or she exercises predominant control Type of responsibility center where the manager influences only costs and is held accountable for a specific output at a given level of cost Measure of the ability of a firm or segment within a firm to utilize available resources effectively to generate a positive return for shareholders Transfer price based on the external market price less any cost savings Situation that motivates a manager to act in his or her own best interest even though the corporation as a whole 3. Controllability concept Cost-based transfer price 4. Cost center 5. . may suffer Decentralization Investment center . 6. The point in an organization where the control over revenue or expense items is located 7. Transfer price that is based on the historical or standard cost incurred by the supplying segment Type of responsibility center where the manager can influence revenues, expenses, and capital invested in his or 8. her center to attain the best performance possible 9. Type of responsibility center where the manager can influence both revenues and expenses for his or her center Approach that evaluates a manager on his or her ability to maximize the dollar value of earnings above some 10. targeted level of earnings 11. Reports comparing budgeted and actual controllable costs for each center within a firm When variances from the budget are emphasized in reporting procedures so that management concentrates its 12. attention on those variances from the budget 13. Transfer price that is established by agreement of both the selling and buying segments of the firm 14. Practice of delegating authority and responsibility for the operation of business segments