​Which of the Following Is FALSE

question 110

Multiple Choice

​Which of the following is FALSE?

• A)​Maximizing division profits always leads to maximizing company-wide profits
• B)Managers of profit centers are usually given a lot of discretion in their decision making
• C)Profit centers usually largely run themselves
• D)​A manager being rewarded on division revenues has the most incentive to make good decisions for his division

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Definitions:

Traditional Costing

An accounting method that applies factory overhead costs to products based on a predetermined overhead rate.

Unit Product Cost

The total cost associated with making one unit of a product, including materials, labor, and overhead.

Traditional Costing

An accounting method that allocates overhead costs to products based on volume-related measures, such as direct labor hours.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to related products and services based on the actual consumption of resources.