Metro General Hospital (Scenario)

question 86

Multiple Choice

Metro General Hospital (Scenario)
Joyce is the chief administrator in charge of a department at Metro General Hospital. When she worked as a registered nurse at a smaller community hospital, Joyce enjoyed the flexible structure, minimal rules, and team approach to decision making by nurses, administrators, and doctors. However, the situation at Metro is different. Metro has a tall, rigid structure with many rules and procedures designed to standardize jobs and guide employee behaviour. One such rule requires that all decisions in Joyce's department must be signed off by her alone) As a result, Joyce seems to spend most of her time filling out forms and signing documents. She also feels that the numerous levels of hierarchy are unnecessary and place barriers between herself and her staff. Joyce is not exactly sure why things have to be so "organized" and is planning to talk to her boss about making some changes to increase flexibility and reduce the number of rules and procedures.
-The requirement that Joyce sign off on all decisions in her department specifically relates to which of the following elements of structure?

• A)centralization
• B)span of control
• C)departmentalization
• D)unity of command

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Definitions:

Contribution Margin

The amount remaining from sales revenue after variable expenses have been deducted, indicating how much revenue is contributing to fixed expenses and net income.

Variable Costing

An accounting method that only considers variable costs (costs that vary with the level of output) when calculating the cost of goods sold and production.

Absorption Costing

An accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a unit of product.

Net Operating Income

Represents the difference between operating revenues and operating expenses.