Pros and cons of incentives and performance measures


Question: If a company wants to allocate Head Quarters administrative expenses to its consulting offices then what are the pros and cons for each of the following in terms of incentives, performance measures:

Allocating expenses based on:

1. Professional staff compensation

2. supplies and offices expenses

3. profit contribution of each office

4. fee revenues

5. profit contribution percent to fee revenue

6. total expenses at individual offices.

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Accounting Basics: Pros and cons of incentives and performance measures
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