The Authority-Rule Decision-Making Method

question 8

Multiple Choice

The authority-rule decision-making method

• A) works only for minor issues.
• B) empowers the designated leader to make the final decision.
• C) incorporates into the final decision all the suggestions supplied by subordinates.
• D) involves a laissez-faire leader.

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Definitions:

Gross Profit

The financial measure representing the difference between sales revenue and the cost of goods sold before deducting administrative and selling expenses.

CVP Analysis

Cost-Volume-Profit Analysis; a financial tool used to determine the impact on an organization's profits due to changes in volume, costs, and prices.

Fixed Cost Per Unit

The portion of fixed costs attributed to each unit of production, which stays constant regardless of the level of production or sales volume.

CVP Analysis

Cost-Volume-Profit Analysis; a management accounting tool that helps understand the relationship between costs, volume, and profit.