Prospector Business Units and Their Marketing Departments Are Likely to Perform

question 9

Multiple Choice

Prospector business units and their marketing departments are likely to perform better when:

• A)The decision-making authority is centralised.
• B)Rigid rules and policies dominate managerial discretion.
• C)There is a high degree of formalisation.
• D)They are decentralised.

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Definitions:

Departmental Overhead Rates

Overhead allocation rates used that vary by department within a company, recognizing that different departments incur different amounts of overhead costs.

Direct Labor Hours

The total hours worked by employees who are directly involved in the production of goods or services.

Overhead Allocation Base

A measure or activity, such as direct labor hours or machine hours, used to allocate overhead costs to products or services.

Direct Labor Hours

Direct labor hours represent the total hours worked by employees directly involved in producing goods or providing services in a manufacturing or service setting.