Which of the following is an argument against the sued of direct (variable) costing and in favour of full (absorption) costing?
A Absorption costing overstate the balance she value of inventories
B Variable factory overhead is a period cost
C fixed manufacturing overhead is difficult to allocated properly
D fixed manufacturing overhead is necessary for the production of a product
The manager of a profit center should not be responsible for which of the following types of decision?
A Deciding which supplier should be used for the purchase of direct material
B Establishing the number of employees that will need to work each day
C Deciding wither or not their segment should purchase additional machinery
D deciding whether or noy to accept a special order from a customer
Residual income is a better for the performance evaluation of an investment centre manager than return on investment because:
A The problem associated with measuring the asset base are eliminated
B capital budging projects in the best interest of the company will not be rejected by investment center manager
C Only the gross book value of assets needs to be calculated
D residual income does not increase as assets are depreciated