Answer (B) is correct. Managerial performance ordinarily should be evaluated only on the basis of those factors controllable by the manager. If a manager is allocated costs that (s)he cannot control, dysfunctional motivation can result. In the case of allocations, a cause-and-effect basis should be used. Allocating the costs of upkeep on a headquarters building on the basis of sales revenue is arbitrary because cost may have no relationship to divisional sales revenues. Consequently, divisional ROI is reduced by a cost over which a division manager has no control. Furthermore, the divisions with the greatest sales are penalized by receiving the greatest allocation.