The portion of overheads in profit center billings hampers the manager’s positive income. How do I argue in this case?
Let out the portion of overheads from the profit center’s income statement. Instead increase the target planned marginal costing by the amount of the overheads. This is then no longer a question of unjust overheads but rather
the issue of achieving the set targets. Marginal costing leads to a price war
and the whole issue is easily lost sight of. This is less tidy. The income is the same in total according to amount. However, the area billings display motivating target values and the classic overhead excuse is dropped.
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