A parent company rewarding managers on profit centers can simply
A)Subtract division costs from the division revenue and reward the manager on the difference
B)Add the division costs to the division revenue and reward the manager on the sum
C)Reward the manager on the revenue of the division
D)Reward the manager on the costs of the division

Question

​A parent company rewarding managers on profit centers can simply
A)​Subtract division costs from the division revenue and reward the manager on the difference
B)Add the division costs to the division revenue and reward the manager on the sum
C)Reward the manager on the revenue of the division
D)​Reward the manager on the costs of the division

Quizplus · Accepted Answer

Subtracting division costs from division revenue will give the profit generated by the division. Rewarding the manager on the difference will incentivize them to increase profits and control costs. The other options (B, C, and D) do not give an accurate measure of the manager's performance as they do not take into account the costs associated with generating revenue.

​A Parent Company Rewarding Managers on Profit Centers Can Simply

A Parent Company Rewarding Managers on Profit Centers Can Simply