Discussion Post
We look at measuring the performance of a profit center. To do this, we have to allocate the various indirect costs and service department costs to the profit centers to better gauge their profitability. However, by doing so, we attribute many costs that are not directly controlled by the unit's management (i.e. depreciation, advertising, etc.).
a) In these cases, why is it important to still allocate these costs?
b) At what level of management should these costs be relevant when determining that manager's performance?
c) What would be a better way to evaluate the unit manager's performance?
The response should include a reference list. Using double-space, Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.