In Designing an Effective Management Control System for a Multinational

question 40

Multiple Choice

In designing an effective management control system for a multinational corporation,the accountant should measure factors appropriate for each unit's level of responsibility. Which of the following measures would be appropriate for evaluating the performance of a cost center?

• A)return on investment
• B)EBIT
• C)output volume
• D)residual income

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Definitions:

Profit Maximization

The process or strategy of adjusting operations and decisions to achieve the highest possible profit.

Utilitarianism

A moral theory that advocates for actions that maximize happiness and well-being for the majority of people.

Wealth Distribution

The manner in which assets, wealth, or income is disbursed among individuals or groups within a society.

Ethical Behavior

Refers to acting in ways considered morally right and proper in a given profession or situation.