The following are nine technical accounting terms introduced or emphasized in this chapter:

Each of the following statements may (or may not) describe one of these technical terms. For each statement, indicate the accounting term described, or answer €œNone€ if the statement does not correctly describe any of the terms.
a. The costs deducted from contribution margin to determine responsibility margin.
b. Cost to produce plus a predetermined markup.
c. Fixed costs that are readily controllable by the manager.
d. A subtotal in a responsibility income statement, equal to responsibility margin plus committed fixed costs.
e. The subtotal in a responsibility income statement that is most useful in evaluating the short run effect of various marketing strategies on the income of the business.
f. The subtotal in a responsibility income statement that comes closest to indicating the change in income from operations that would result from closing a particular part of the business.
g. The amount used in recording products or services supplied by one business unit toanother.

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Responsibility margin Contribution margin Performance margin Transfer price Cost-plus transfer price Product costs Common fixed costs Traceable fixed costs Committed fixed costs