Firms that allocate costs based on head count motivate their managers to reduce the number of employees.

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Firms that allocate costs based on head count motivate their managers to reduce the number of employees. What kind of dysfunctional and profit destroying (from the firm’s perspective) behavior might such allocations engender?

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Managerial accounting

ISBN: 978-0471467854

1st edition

Authors: ramji balakrishnan, k. s i varamakrishnan, Geoffrey b. sprin

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Question Posted: Feb 20, 2013 09:34 AM

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Firms that allocate costs based on head count motivate their managers to reduce the number of employees.

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In many firms especially service and IT firms people are the most valuable resource Getting rid ...View the full answer

Managerial accounting

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