Marco, the Owner of Spaghetti Factory, Is Involved in the Company's

question 54

Multiple Choice

Marco, the owner of Spaghetti Factory, is involved in the company's daily decisions and has established procedures for every task. The company rules are clearly specified in the handbook, and Marco also believes in close supervision of all employees. Spaghetti Factory is a(n) ________ organization.

• A) informal
• B) mechanistic
• C) organic
• D) decentralized
• E) nonhierarchical

---

Definitions:

Direct Labor Costs

Expenses related to employees who physically manufacture a product.

Factory Overhead Cost

Indirect manufacturing costs that are not directly tied to the production of specific goods, including utilities, maintenance, and salaries of supervisors.

Overapplied/Underapplied

Terms used in cost accounting to describe the situation where the allocated indirect costs do not match the actual indirect costs, resulting in a discrepancy at the end of an accounting period.

Factory Labor

Direct work performed in the factory that is actively involved in the manufacturing process of goods.