Division Managers Who Are Paid Solely on the Basis of Business-Unit

question 197

True/False

Division managers who are paid solely on the basis of business-unit performance may be less likely to share resources with other divisions.

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Definitions:

Activity Rate

In cost accounting, the rate charged for a particular business activity, often used in activity-based costing to allocate costs to products or services.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to specific activities, providing a more precise understanding of product or service costs.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to related products and services based on the activities that generate those costs.

Direct Labor-Hours

The total number of labor hours worked by employees who are directly involved in the manufacturing process.