Which of the Following Statements Is a Reason for Using

question 58

Multiple Choice

Which of the following statements is a reason for using operating income or EBIT as a measure of performance in a profit center of a multinational corporation?

• A) It is much easier to calculate than other measures.
• B) It is the only measure available to the senior management of the parent company.
• C) It excludes interest and taxes, which are beyond the manager's control.
• D) Divisional managers will maximize output if this measure is used for management control.

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Definitions:

High Value

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Continuous-Process Production

A manufacturing approach where materials are continuously in motion or being processed, resulting in a constant output.

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Furniture that is specially made according to the customer's specifications regarding design, size, and materials.

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