Managers of profit centers earn more when their divisions
A)increase their sales and decrease their costs
B)decrease their sales and increase their costs
C)increase the costs of the components for which they are responsible
D)none

Question

Quizplus · Accepted Answer

Managers of profit centers are responsible for generating profits for their division. They can do this by increasing sales and decreasing costs, which ultimately leads to higher profits. By doing so, they are able to justify their actions and earn more through bonuses, promotions, and perks. Decreasing sales and increasing costs would have the opposite effect and would not be beneficial for the manager or the company. Increasing the costs of components is also not a valid strategy as it would negatively impact profits.

Managers of Profit Centers Earn More When Their Divisions