Janice Black, manager of the Produce Department at Spankys Grocery, has a monthly responsibility margin of $4,000.

Question:

Janice Black, manager of the Produce Department at Spanky’s Grocery, has a monthly responsibility margin of $4,000. The store manager has decided to allocate storewide common costs to each department. After the allocation, Ms. Black’s responsibility margin is-$1,200 per month. Identify the disadvantages of allocating common costs to responsibility centers.