Managers of profit centers earn more when their divisions
A)increase their sales and increase their costs
B)decrease their sales and increase their costs
C)decrease the costs of the components for which they are responsible
D)increase the costs of the components for which they are responsible

Question

​Managers of profit centers earn more when their divisions
A)​increase their sales and  increase their costs
B)decrease their sales and increase their costs
C)decrease the costs of the components for which they are responsible
D)​increase the costs of the components for which they are responsible

Quizplus · Accepted Answer

Managers of profit centers are responsible for maximizing the profitability of their division. They earn more when they are able to decrease the costs of the components they are responsible for, as it would improve the division's bottom line. Increasing sales and costs, or decreasing sales and increasing costs wouldn't necessarily lead to increased profits.

​Managers of Profit Centers Earn More When Their Divisions

Managers of Profit Centers Earn More When Their Divisions