A Divisionalized Structure Works Best Where the Organization

question 91

Multiple Choice

A divisionalized structure works best where the organization:

• A)has few employees.
• B)operates in one market with one product and one client group.
• C)wants to assign the most power to executives responsible for technical expertise in the organization.
• D)is expanding into several distinct product and/or client groups.
• E)wants to maintain a strong centralized control over business activities.

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Definitions:

Unit Contribution Margin

The amount of revenue remaining per unit after deducting variable costs; calculated as unit selling price minus unit variable costs.

Unit Sales Price

The amount that a business charges for one unit of its product or service.

High-Low Method

A technique used in cost accounting to estimate variable and fixed costs based on the highest and lowest levels of activity.

Variable Cost Element

A cost that varies directly with the level of production or sales volume, such as materials and direct labor.