When the cost of services from a shared activity is ________ the cost of comparable services provided by a division itself or by an outside supplier than the division, general managers have a strong incentive ________.
A) less than; to use the services of shared activities
B) greater than; to use the services of shared activities
C) less than; to use the services of an outside supplier
D) equal to; to use the services of an outside supplier

Question

Quizplus · Accepted Answer

When the cost of services from a shared activity is less than the cost of comparable services provided by a division itself or by an outside supplier than the division, general managers have a strong incentive to use the services of shared activities. This is because it is cheaper to use services from shared activities as compared to the other alternatives.

When the Cost of Services from a Shared Activity Is