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15 Cards in this Set
- Front
- Back
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Departmental Accounting System
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Provides information for managers to evaluate the profitability or cost effectiveness of each department's activities
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Responsibility Accounting System
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To control costs an expenses and evaluate managers' performances by assigning costs ad expenses to the managers responsible for controlling them
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Profit Center
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Incurs costs and generates revenue
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Cost Center
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Incurs costs without directly generating revenues
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Investment Center
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Incurs costs and generates revenues, and is responsible for effectively using center assets
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Direct Expense
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Costs readily traced to a department because they are incurred for that department's sole benefit
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Indirect Expense
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Costs that are incurred for the joint benefit of more than one department and cannot be readily traced to only one department
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Departmental Contribution to overhead
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A report of the amount of sales less direct expenses
(Sales - Direct Expenses) |
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Return on Investment
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Investment center net income/investment center average invested assets
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Residual Income
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Investment Center NI - Target Investment Center NI
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Hurdle Rate
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Typically the cost of obtaining financing
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Balance Scorecard
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A system of performance measures
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Responsibility Accounting Budgets
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Managers should be involved in preparing their budgets
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Responsibility Accounting Performance Report
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Accumulates and reports costs and expenses that a manager is responsible for an their budgeted amounts
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Transfer Price
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The price recorded when transactions are transferred within the same company
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