The manager of a profit center is evaluated on the basis of the amount of sales that have been generated from the goods or services produced in his/her division.On the basis of which of the following budget approaches is the divisional manager being remunerated?
A) Expense budget approach
B) Cash flow budget approach
C) Revenue budget approach
D) Profit budget approach
E) Operating profit budget approach

Question

Quizplus · Accepted Answer

In a revenue budget approach, managers are asked to maximize the revenues from the sales of goods and services produced. Managers are then remunerated on the basis of the net sales generated by the division.

The Manager of a Profit Center Is Evaluated on the Basis