An Organization in the Dissolution Stage Should

question 12

Multiple Choice

An organization in the dissolution stage should:

• A)replace its top- management team to prevent death.
• B)reorganize to reduce costs to prevent death.
• C)change to a specialist strategy to survive.
• D)liquidate its assets and declare bankruptcy.

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Definitions:

Capacity

The maximum amount that something can contain or produce.

Variable Costs

Costs that change in proportion to the amount of goods produced or the volume of sales, like labor and materials.

Contribution Margin Ratio

The ratio that represents what percentage of sales contributes to the covering of fixed costs, calculated by subtracting variable costs from sales revenue and dividing the result by sales revenue.

Operating Income

Earnings from a company's core business operations, excluding revenue and expenses from non-operating activities like investments.