Residual Income Should Not Be Used to Evaluate a Profit

question 89

True/False

Residual income should not be used to evaluate a profit center.

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Definitions:

Organization Performance

A measure of how effectively an organization reaches its goals, typically evaluated through financial results, efficiency, and satisfaction levels.

Attributes

Characteristics or qualities that describe an object, person, or phenomena.

Management By Objectives

A management strategy where employees set objectives that contribute to overall company goals, enhancing productivity and motivation.

Performance Objectives

Specific goals related to the output or outcome expected from an employee's work, often used for evaluation and improvement purposes.