alleryStart learning →A discretionary cost center differs from a cost center because the relationship between costs and output is:
ANot open to debate
BNot held on record
CNot well defined
DNot worth costing
Answer & Solution
Correct answer: C. Not well defined
1. A plain cost centre can tie its spending to what it produces.
2. A discretionary one cannot draw that line clearly.
3. There is no well-defined relationship between the centre's costs and its services or products.
4. The manager is still held responsible for the controllable costs.
_Source: OpenStax Principles of Accounting Volume 2, Managerial Accounting (CC BY-NC-SA 4.0), Ch 9 'Responsibility Accounting and Decentralization', sections 9.1-9.4_
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