Question

Should we evaluate a production manager’s performance on the basis of operating expenses? Why?

Short answer

Yes, because production managers are responsible for the expenses directly related to the production.

Step-by-step solution

Meaning of Operating Cost

All costs incurred for a firm's normal upkeep and administration are operating costs. Costs associated with exercises that create revenue are more precisely alluded to as operating costs.

Explaining why Should we evaluate a production manager’s performance based on operating expenses

Yes, we should assess a production manager's performance using operational expenses since they compile the reporting costs based on the manager's authority to make daily product decisions. The issues directly under the manager's control are used to evaluate their performance. The production manager of the company often oversees the operating expenses. As a result, it needs to be the main factor considered while evaluating their work.