Ortiz Is a Manager of BRS Corp

question 111

Multiple Choice

Ortiz is a manager of BRS Corp.Ortiz's division did not meet financial targets this year.Ramirez, manager of another division, has indicated that Ortiz's division incurred significant costs which resulted in Ramirez's division setting record profits for the year.As a result, performance for BRS as a whole exceeded projections.Which of the following pairings of organizational structures for BRS and bonus for Ortiz is most plausible?

• A) Cooperative structure; no bonus due to failure to meet divisional target
• B) Competitive structure; no bonus due to failure to meet divisional target
• C) Cooperative structure; a bonus for increasing organizational performance
• D) Competitive structure; a bonus for increasing organizational performance

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Definitions:

Estimated Overhead

Projected costs of indirect materials, labor, and other expenses that are necessary for production but are not directly traceable to specific products.

Allocation Factor

A criterion or formula used to distribute costs or revenues among various departments, products, or projects based on relevant measures such as time, usage, or volume.

Direct Labor Hours

The total hours worked by employees directly involved in the production process, used as a measure for allocating labor costs to products or services.

Factory Overhead

All indirect costs associated with the production process, such as utilities, maintenance, and salaries for managers.