When an Organization Is Centralized

question 12

Multiple Choice

When an organization is centralized,

• A)authority is concentrated at the top of the managerial hierarchy.
• B)subordinates play an important role in decision making within the company.
• C)it prevents the organization from pursuing its strategy.
• D)it makes middle and first-line managers more flexible and adaptable.
• E)it allows people who are closest to problems to respond to them in a timely manner.

---

Definitions:

Manufacturing Overhead

Manufacturing overhead encompasses all indirect costs associated with the manufacturing process, including utilities, maintenance, and equipment depreciation.

Fixed Manufacturing Overhead

Overhead costs in manufacturing that remain constant regardless of the volume of production, such as salaries of supervisors and factory rent.

Manufacturing Departments

the specific sections within a manufacturing facility where different stages of the production process are completed, such as assembly, painting, or packaging.

Predetermined Overhead Rate

A rate used to allocate overhead costs to products or services, calculated prior to the accounting period based on estimated costs and activity levels.