When cost allocations are used to encourage the sales managers to push the higher margin products this action will link:

Question

Quizplus · Accepted Answer

Cost allocations are a way to allocate indirect costs to products or services. By allocating these costs, managers can better understand the true cost of each product or service. By encouraging the sales managers to push the higher margin products, they are incentivizing them to make decisions that will lead to higher profitability. This action links decision making (i.e., pushing higher margin products) and management performance evaluation (i.e., evaluating managers based on their ability to increase profitability).

When Cost Allocations Are Used to Encourage the Sales Managers