Which of the following would be the BEST reason to use the "full-cost approach" when comparing the performance of several product managers?
A) Unlike the "contribution-margin approach," it charges managers only for the expenses which are directly related to their operations.
B) This approach is required by Federal tax laws.
C) It charges each product manager only for those expenses which he controls.
D) It allows management to consider only the variable costs related to different products.
E) It makes each manager bear a share of the overhead expenses which were made for everyone's benefit.

Question

Quizplus · Accepted Answer

The full-cost approach requires managers to bear a share of overhead expenses, which were made for everyone's benefit. This promotes accountability and encourages managers to make informed decisions about their operations, as they are aware of the indirect costs associated with their products. This approach is particularly useful when comparing performance among managers because it takes into account all costs associated with their operations, not just those that are directly related to their products.

Which of the Following Would Be the BEST Reason to Use