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Question 4

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A responsibility center in which the department manager has responsibility for and authority over costs and revenues is called a(n) _____ center.

a.

profit

b.

cost

c.

volume

d.

investment

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Question 5

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Keystone Co. can further process Product J to produce Product D. Product J is currently selling for $20.00 per pound and costs $15.75 per pound to produce. Product D would sell for $38.00 per pound and would require an additional cost of $8.55 per pound to produce.

The differential revenue of producing Product D is

a.

$18.00 per pound

b.

$6.25 per pound

c.

$6.75 per pound

d.

$22.25 per pound