Final answer:
Option B ('emphasis on volume variances') is NOT a limitation of profit management. Volume variances are often analyzed in profit management to assess their impact on profitability, contrasting with the other options which do highlight limitations like past focus and short-term optimization.
Step-by-step explanation:
The question asks to identify which option is NOT a limitation of profit management. Profit management has several known limitations, such as the emphasis on quantifiable measures, the focus on past performance, and a possible higher emphasis on short-run optimization. There is no mention of emphasis on volume variances as a limitation in classical profit management. Instead, profit management often includes analyzing volume variances to understand how they affect profits.
Proper profit management entails understanding costs and revenues and analyzing how market structures affect pricing and production decisions. This work is critical for businesses aiming to maximize profits, particularly from a long-run perspective.
Indeed, one key limitation of profit management is that it focuses on historical data, which does not always predict future performance. There's also a risk that companies focus too much on short-term gains at the expense of long-term sustainability. However, the emphasis on volume variances is more of a management accounting practice to understand how changes in production levels affect costs and profitability, which helps in profit management rather than limiting it.