Which one of the following is a measure of the performance of the manager of a profit centre?
A)ROI
B)success in meeting budgeted goals for non-controllable costs
C)amount of controllable margin generated
D)amount of residual income generated

Question

Quizplus · Accepted Answer

The amount of controllable margin generated is a measure of the performance of the manager of a profit centre as it represents the amount of revenue generated by the centre after deducting all controllable expenses. ROI and residual income are measures of the overall profitability of the centre and do not specifically measure the performance of the manager. Success in meeting budgeted goals for non-controllable costs may be affected by factors outside the manager's control and may not be a fair measure of their performance.

Which One of the Following Is a Measure of the Performance