Chapter 24, Problem 4QS

To determine

Introduction:

Responsibility Accounting System: Responsibility Accounting System is an accounting system which reports responsibility for managers and helps in evaluation of the performance of managers.

Direct Expenses: Direct expenses are expenses which are directly traceable to the production units or department.

Indirect Expenses: Indirect expenses are expenses which are not directly traceable to the production units and these expenses are incurred for more than one unit or departments.

Controllable Costs: Controllable Costs are the costs which can be controlled by manager’s decisions.

Uncontrollable Costs: Uncontrollable Costs are the costs which cannot be controlled by manager’s decisions.

To determine: The Costs to be included in the responsibility accounting report of the service department