One Disadvantage of Product Departmentalization Is That

question 72

Multiple Choice

One disadvantage of product departmentalization is that:

• A) there is less coordination of functions at the product division level.
• B) it requires more personnel and material resources.
• C) lower management assumes a greater burden of establishing effective coordination.
• D) it results in an increased threat from competition.

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Definitions:

Variable Costing

A costing method that includes only variable production costs in the cost of goods sold and reports fixed overhead separately.

Absorption Costing

A method of product costing that includes all manufacturing costs, both variable and fixed, in the cost of a product.

Manufacturing Costs

Expenses directly associated with the production of goods, including direct materials, direct labor, and manufacturing overhead.

Income

The money received by an entity in return for its goods or services, or through investments.