In the Split Control Management Structure

question 29

Multiple Choice

In the split control management structure

• A)Companies share all decision making.
• B)Managers of the strategic alliance split from and act independently from their parent companies.
• C)Partners divide decision making control by functional areas.
• D)Each company takes a turn providing the operational managers.

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Definitions:

Fixed Costs

Costs that do not change with the level of production or sales activities, such as rent, salaries, and insurance premiums.

Variable Manufacturing Overhead

Costs that vary with production volume, such as utilities and materials, which are only incurred as a result of manufacturing activities.

Direct Materials

Raw materials that are directly traceable to the production of specific goods or services.

Contribution Margin

The amount by which sales revenue exceeds variable costs, contributing to covering fixed costs and generating profit.