As a New Business Owner You Have Decided to Take

question 37

Multiple Choice

As a new business owner you have decided to take a contingency approach to organizational design.What must first be considered in order to identify the most appropriate structure for your company?

• A) structural variables
• B) managerial strategy
• C) financial variables
• D) contextual variables

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Definitions:

Work in Process Inventory

The inventory account that tracks the costs of materials, labor, and overhead for products that are in the process of being manufactured but are not yet completed.

Weighted-Average Method

An inventory costing method that averages the cost of inventory items to determine the cost of goods sold and ending inventory.

Process Costing System

A process costing system is used in manufacturing environments where the products are indistinguishable from each other and allocates the production costs based on the processes involved.

Conversion Costs

The sum of direct labor and overhead costs, which are incurred to convert raw materials into finished products.