The Performance Measurement System Must Ensure That Managers Know the Specific

question 88

Multiple Choice

The performance measurement system must ensure that managers know the specific goals and targets for the subunits. This statement reflects which of the following performance measurement goals?

• A) Motivating unit managers
• B) Communicating expectations
• C) Providing feedback
• D) Motivating managers

---

Definitions:

Overhead Rate

The rate at which indirect costs are allocated to products or services, often used in calculating the total cost of production.

Fixed Overhead

Regular, fixed costs that do not vary with the level of production or sales, such as rent, salaries, and insurance.

Capacity

The maximum amount of goods or services a company can produce or deliver in a given period with existing resources.

Allocation Base

A criterion or measure used for distributing overhead costs among various products, services, or departments within a business.