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A corporation pays bonuses to its managers based on operating income, as calculated under variable costing. It is now 2 months before year end, and
A corporation pays bonuses to its managers based on operating income, as calculated under variable costing. It is now months before year end, and earnings have been depressed for some time. Which one of the following actions should the production manager definitely implement to maximize the bonus for this year?
A Implement, with the aid of the controller, an activitybased costing and activitybased management system.
B Cut $ million of advertising and marketing costs.
C Postpone $ million of discretionary equipment maintenance until next year.
D Step up production so that more manufacturing costs are deferred into inventory.
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