Digistar, Inc

question 102

Multiple Choice

Digistar, Inc., is a large corporation that produces a wide variety of products and services. As a result, it is a tall organization with a product structure. Employees are only expected to report to a single boss. Even so, communications between various functions in a division has become a problem. Because of this, it often takes a long time to bring new products to market, which is a severe handicap in highly competitive areas, such as printers. To expedite the process of bringing new printers into the market, Digistar should form a

• A)boundaryless structure between the design division and marketing division of the company.
• B)liaison relationship between the design and marketing section of the printer division.
• C)team consisting of managers from the design, manufacturing, and marketing sections of the printer division.
• D)task force consisting of managers from the design, manufacturing, and marketing divisions of the company.

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Definitions:

Fixed Costs

Costs that remain constant in total regardless of changes in the level of activity within a relevant range.

Static Budget

A budget that is based on fixed assumptions and does not change with variations in business activity levels.

Master Budget

A comprehensive financial planning document incorporating all of an organization's financial plans, including sales, production, and cash budgets.

Overhead Budget

An estimation of variances and anticipated indirect costs associated with the normal operations of a business.