True / False Questions

1 Evaluation of the performance of managers of profit centers assumes that the managers can control or influence both costs and revenue generation. True False

2. Departmental wage expenses are direct expenses of that department. True False

3. A cost center does not directly generate revenues. True False

4. Responsibility performance reports usually compare actual costs to the budgeted costs amounts. True False

5. Generally, it does not matter how cost allocations are designed and explained, because most employees do not care whether the allocations appear to be fair or not. True False

6. Return on total assets for a cost center is a useful measure to evaluate the cost center manager. True False

7. Departmental contribution to overhead is the amount of revenues for that department less its direct expenses. True False

8. Controllable costs are the same as direct costs. True False