1B2F MOST FIRMS ALLOCATE CORPORATE AND OTHER SUPPORT COSTS TO DIVISIO...

121. CSO: 1B2a LOS: 1B2f

Most firms allocate corporate and other support costs to divisions and departments for all

of the following reasons except to

a. remind profit-center managers that earnings must be adequate to cover some share

of the indirect costs.

b. stimulate profit-center managers to put pressure on central managers to control

service costs.

c. create competition between divisions and departments, and their managers.

d. fix accountability and evaluate profit centers.

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