Phoenix Motor Corp

question 19

Essay

Phoenix Motor Corp.is considering using a loosely coupled organizational structure.They have asked for your evaluation of such a structure and if you would recommend it for an automobile manufacturer.What will your answer be?

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Definitions:

Raw Materials

Basic materials that are used in the manufacturing process to produce goods and products.

Predetermined Overhead Rate

A rate used to charge manufacturing overhead cost to jobs that is established in advance for each period. It is computed by dividing the estimated total manufacturing overhead cost for the period by the estimated total amount of the allocation base for the period.

Variable Overhead Rate

The ratio of variable overhead costs to an activity base, used to allocate variable overhead costs to products or services.

Direct Labor-Hours

The total hours worked by employees directly involved in the manufacturing process or providing services.