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    PracticeACCAACCA MA — Management Accounting Practice Exam 5Question 04
    Medium2 marksMultiple Choice
    A. The nature, source and purpose of management informationSyllabus Area AResponsibility Centers

    ACCA · Question 04 · A. The nature, source and purpose of management information

    The manager of a large commercial hydroponic farm has the authority to negotiate selling prices with supermarkets, control the labor and fertilizer costs, and make decisions regarding the purchase of new automated harvesting equipment.

    Which type of responsibility center does this manager control?

    Answer options:

    A.

    Cost center

    B.

    Revenue center

    C.

    Profit center

    D.

    Investment center

    How to approach this question

    Identify the scope of authority: selling prices (revenue), labor/fertilizer (costs), and new equipment (investment).

    Full Answer

    D.Investment center✓ Correct
    Because the manager controls revenues (negotiating prices), costs (labor/fertilizer), and capital investments (purchasing new equipment), the farm operates as an investment center.

    Common mistakes

    Selecting Profit Center by missing the detail about purchasing new automated harvesting equipment.
    Question 03All questionsQuestion 05

    Practice the full ACCA MA — Management Accounting Practice Exam 5

    38 questions · hints · full answers · grading

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