The Success of the Multidivisional Structure as an Organizational Form

question 10

Multiple Choice

The success of the multidivisional structure as an organizational form was because:

• A)Line-and-staff structures allowed companies to serve to a broader geographical area
• B)The separation of strategic from operational decision allowed corporate management to exercise more effective strategic and financial control
• C)Divisions were forced to compete with one another for corporate resources
• D)It permitted decision making ot be decentralized

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Definitions:

Absorption Costing

An accounting method that includes all manufacturing costs—direct materials, direct labor, and both variable and fixed overhead—in the cost of a product.

Product Cost

Product cost refers to the total costs incurred to create a product, including direct labor, direct materials, and allocated overhead expenses, crucial for pricing and profitability analysis.

Unit Costs

The total expense incurred to produce, store, and sell one unit of a product or service.

Variable Costing

An accounting approach that includes only variable production costs (direct materials, direct labor, and variable manufacturing overhead) in product costs, excluding fixed overheads.