At the End of 2018, Diatomic Company Implemented a New

question 144

Multiple Choice

At the end of 2018, Diatomic Company implemented a new labor process and redesigned its product with the expectation that input usage efficiency would increase. Now, at the end of 2019, the president of the company wants an assessment of the changes on the company's productivity. The data needed for the assessment are as follows: $\begin{array}{lrr}&2019&2018\\\text { Output } & 45,000 & 54,000 \\\text { Output prices } & \$ 10 & \$ 10 \\\text { Materials (lbs.) } & 22,500 & 22,950 \\\text { Materials unit price } & \$ 3 & \$4 \\\text { Labor (hrs.) } & 18,000 & 16,875 \\\text { Labor rate per hour } & \$ 5 & \$ 5 \\\text { Power (kwh) } & 11,250 & 14,625 \\\text { Price per kwh } & \$ 2 & \$ 3\end{array}$
What is the total change in profits from 2018 to 2019?

• A)$319,950
• B)$270,000
• C)$90,000
• D)$49,950

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Definitions:

Simple Structure

An organizational design characterized by a low degree of departmentalization, wide spans of control, authority centralized in a single person, and little formalization.

Adhocracy

An organizational structure characterized by flexibility, employee empowerment, and an emphasis on innovation and problem-solving rather than hierarchy and strict procedures.

Globalization

The method through which companies or various entities expand their influence globally or begin to function at an international level.

Cultural Differences

Variations in the ways of life, traditions, and practices among groups of people from different backgrounds.