A Command System Is a Method of Organizing Production That

question 51

Multiple Choice

A command system is a method of organizing production that

• A) uses a market-like mechanism inside the firm.
• B) relies on competitive markets.
• C) uses a managerial hierarchy.
• D) uses incentives most extensively.

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Definitions:

Manufacturing Costs

Expenses directly related to the production of goods, including raw materials, labor, and overhead.

Prime Costs

The sum of direct materials cost and direct labor cost, representing the primary costs involved in producing a product.

Finished Goods Inventory

The stock of completed products ready for sale but not yet sold, representing a current asset on the balance sheet.

Manufacturer

A company or individual that creates goods using raw materials and components through various processes, labor, and machinery.