Which of the following is NOT a problem with using cost,revenues or profits as performance measures?
A)It is difficult to attribute costs to various functional units
B)Cost and profit information could be hidden or manipulated
C)They are difficult to compare with other firms
D)Weaknesses in functional areas are not identified

Question

Which of the following is NOT a problem with using cost,revenues or profits as performance measures?
A)​It is difficult to attribute costs to various functional units
B)Cost and profit information could be hidden or manipulated​
C)They are difficult to compare with other firms​
D)Weaknesses in functional areas are not identified​

Quizplus · Accepted Answer

While there may be difficulties in attributing costs to functional units and potential for hidden or manipulated information, the main purpose of using cost, revenue, and profit as performance measures is to assess the financial success of a business. These measures can be compared with industry benchmarks and historical trends to evaluate a company's relative financial performance. Additionally, analyzing these measures can help identify weaknesses in functional areas such as a high cost of goods sold or low profit margins. The only option that is not a problem with using these measures is difficulty in comparing with other firms since benchmarking is a common practice in business analysis.

Which of the Following Is NOT a Problem with Using