Which of the Following Is True of a Formal Structure

question 67

Multiple Choice

Which of the following is true of a formal structure?

• A) Formal structures work only in organizations with diverse operations that extend across many products, customers, and work processes.
• B) The lines of the formal structure cut across levels and move from side to side.
• C) Formal structures are characterized by the existence of "in" and "out" groups.
• D) Lines in a formal structure are drawn from person to person according to frequency and type of relationship maintained.
• E) A formal structure consists of vertical layers of management.

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Definitions:

Direct Materials

Raw materials that are directly traceable to the manufacturing of a product and can be easily quantified and allocated to that product.

Break-even Point

The production level at which total revenues equal total expenses, and there is neither profit nor loss.

Contribution Margin Ratio

A financial metric that shows the percentage of sales revenue that exceeds variable costs, contributing to covering fixed costs and generating profit.

Profit-volume Ratio

A measure that indicates the relationship between the profit generated by a business and its sales volume, usually expressed as a percentage.