An Important Lesson from the Chapter 11 Opening Case About

question 154

Multiple Choice

An important lesson from the Chapter 11 Opening Case about Borders is that

• A) Borders did a good job of implementing its strategy but its structure was wrong.
• B) structures rarely evolve in response to strategic change.
• C) while a firm's structure usually follows the strategy, once in place, structure can have a significant effect on strategy.
• D) Borders' decentralized structure led to poor decision making.

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Definitions:

Variable Costing

An accounting method that only considers variable costs (costs that change with production volume) when calculating the cost of goods sold and in the determination of profitability.

Absorption Costing

An accounting method that includes all direct and indirect manufacturing costs in the cost of a product.

Net Income

Net income is the total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.

Variable Costing

An accounting method that includes only variable production costs (materials, labor, and variable overhead) in product cost calculations, excluding fixed overhead.