Asked by Waleed Farghal on Sep 24, 2024
Verified
Which of the following is FALSE?
A) Maximizing division profits can sometimes lead to reducing company-wide profits
B) Managers of profit centers are usually given a lot of discretion in their decision making
C) Profit centers usually require the highest degree of attention by corporate headquarters
D) A manager being rewarded on division revenues has the most incentive to make good decisions for his division
Division Profits
The earnings attributive to a specific division or branch of a larger company, often used to assess the performance of that segment.
Profit Centers
Profit centers are segments, branches, or divisions of a company that are treated as a separate business, responsible for generating their own revenues and profits.
Corporate Headquarters
The main office or center of operations for a business where significant managerial and administrative work is conducted.
- Differentiate the goals of maximizing profits at the divisional level versus enhancing profits across the entire company.
Verified Answer
SS
Stephen Sodoke1 day ago
Final Answer :
C
Explanation :
Profit centers are usually designed to function independently and generate profits on their own, therefore they require less attention from corporate headquarters compared to cost centers or investment centers.
Learning Objectives
- Differentiate the goals of maximizing profits at the divisional level versus enhancing profits across the entire company.