Which of the Following Statements Is True About the Simple

question 34

Multiple Choice

Which of the following statements is true about the simple structure?

• A) It is very expensive to operate.
• B) It is characterized by a high degree of formalization.
• C) It becomes increasingly inadequate as an organization grows.
• D) It is most widely adopted in large businesses in which the manager and owner are different.
• E) It is characterized by a narrow span of control.

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Definitions:

Fixed Costs

Overheads such as rent, salaries, and insurance that do not fluctuate with the level of goods produced or sold.

Variable Costs

Charges that vary in relation to the volume of output or services provided by a firm.

Fixed Costs

Expenses that do not change regardless of the level of production or business activity, such as rent, salaries, and insurance.

Selling Price

The amount of money for which an item is sold, potentially different from listing or cost price due to discounts or negotiations.