When is a business unit known to be a profit centre?
A. If its operations or departments are not directly involved in revenue generating activities, but instead focus on elements of cost control
B. If its management is evaluated not only on revenues and expenses, but also on asset investment
C. If its management is compensated based on the level of profitability
D. If its management is held accountable for both revenues and expenses and has the authority to make decision regarding its products, markets and source of supply
Answer: Option D
Basic objective of cost accounting is ________
A. tax compliance.
B. financial audit.
C. cost ascertainment.
D. profit analysis.
Process costing is suitable for ________.
A. hospitals
B. oil refing firms
C. transport firms
D. brick laying firms
The cost which is to be incurred even when a business unit is closed is a _____.
A. imputed cost
B. historical cost
C. sunk cost
D. shutdown cost
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