Which of the following best describes the how Investment Centers are evaluated. Investment Centers compare costs to budgeted amounts; Cost and Profit Centers use Return on Investment (ROI) and Residual Income (RI). Cost and Profit Centers compare costs to budgeted amounts; Investment Centers use Return on Investment (ROI) and Residual Income (RI). Cost, Profit and Invesment Centers compare costs to budgeted amounts. Cost, Profit and Investment Centers use Return on Investment (ROI) and Residual Income (RI).

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Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit.  Overhead expenses depend upon the nature of the business operations.