In preparing a responsibility income statement that shows contribution margin and responsibility margin, generally two concepts are involved in allocating costs to the various centers. These concepts are whether the costs are:

Multiple Choice

Traceable to the responsibility center and whether they are material in dollar amount.

Variable or fixed and whether they are directly traceable to the responsibility center.

Variable or fixed and whether they are material in dollar amount.

Traceable to the responsibility center and whether the responsibility center is organized as a profit center or an investment center.