Managerial accounting

flexible budgets can be prepared for each of the types of budgets included in the master budget

with a flexible budget, if production increases budget allowances for variable costs should increase both directly and proportionately

flexible budgets reports consist of two sections: production data and cost data

under responsibility accounting the evaluation of managers performance is based on the matters directly under that managers control

the terms controllable costs and noncontrollable costs are synonymous with varible costs and fixed costs

only controllable costs are included in a responsibility performance report and there is no distinction made between variable and fixed costs

a responsibility reporting system begins with the lowest level od responsibility in an organization and moves upward to each higher level

there are three types three types of responsibility centers: cost, segment and investment

the primary basis for evaluating the performance of a manager of an investment center is return on investment