Why Do Managers Care About the Costs Allocated to Their

question 32

Multiple Choice

Why do managers care about the costs allocated to their individual departments?

• A)Managers' performance evaluations frequently depend on their unit's performance more than overall firm performance.
• B)The cost allocated is an integral part of the department's reported profit.
• C)Carefully chosen allocation methods can induce desired behavior.
• D)Carefully chosen allocation methods can dissuade undesired behavior.
• E)All of the above are reasons managers care about the costs allocated to their individual departments.

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