**Question:**Which of the following is a measure of a cost center manager's performance?**Options:**a. return on investment and residual income measures b. balance sheet c. budget performance report d. divisional income statements **Explanation:**This question focuses on identifying the appropriate measure used to evaluate the performance of a cost center manager within an organization. A cost center is a department or function within an organization that does not directly generate profit but is essential for operational activities. Thus, the performance of a cost center manager is typically assessed based on how well they manage and control costs.- **Option a:** Return on investment and residual income measures are primarily used for evaluating profit centers, where profits and investments are direct factors.- **Option b:** A balance sheet provides a snapshot of a company’s financial condition at a specific moment in time and is not specifically tied to a cost center's performance.- **Option c:** A budget performance report is used to track actual expenses against budgeted forecasts, making it suitable for assessing a cost center manager’s performance in managing costs effectively.- **Option d:** Divisional income statements are more relevant for profit and investment centers rather than cost centers.In this context, option **c. budget performance report** is the correct measure for evaluating a cost center manager’s performance.

Cost center managers are in charge of costs but not revenues or investments. Their duty is to lower the cost of making a product of a particular quality or of offering a particular caliber of service. Actual costs versus anticipated costs comparing the segment margin between real and projected Actual ROI and expected ROI comparison based on segment margin and segment-controlled assetsBudget Performance report: The report differentiates between actual and budgeted costs. The management can so determine whether or not the expense was effectively controlled through this report. So, using this information, managers' performance is assessed. A budget performance report compares the period's actual revenues and costs with those projected based on the actual sales volume. It is a management report. To put it another way, it's a report that compares actual company performance to budgeted performance. Hence, option (c) is the correct

Business

Accounting

Which of the following is a measure of a cost center manager's performance? Oa. return on investment and residual income measures Ob. balance sheet Oc. budget performance report Od. divisional income statements

Which of the following is a measure of a cost center manager's performance? Oa. return on investment and residual income measures Ob. balance sheet Oc. budget performance report Od. divisional income statements

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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