March and Simon Developed Three Important Concepts in Their Administrative

question 107

Essay

March and Simon developed three important concepts in their administrative model of decision making.Discuss these three concepts and explain how they would apply to a realistic business-decision situation of your choosing.

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Definitions:

Predetermined Overhead Rate

A rate used to allocate overhead costs to products or job orders, calculated before the period begins based on estimated overhead costs and an allocation base.

Direct Labor-Hours

The total hours worked by employees directly involved in the production of goods or services.

Manufacturing Overhead

All indirect costs associated with the manufacturing process, such as maintenance, utilities, and quality control.

Machine-Hours

A measure of production time that tracks the number of hours a machine is operated.