Which of the Following Is a Disadvantage of a Decentralized

question 102

Multiple Choice

Which of the following is a disadvantage of a decentralized organizational structure?

• A) increasing the size of the corporate bureaucracy
• B) reducing a company's response times to changing external events
• C) discouraging lower-level managers and rank-and-file employees from exercising initiative
• D) putting the organization at risk if higher-level management is unaware of their actions
• E) creating more layers of management

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Definitions:

Standard Costing

An accounting method that assigns predetermined costs to cost units, used to control costs and measure performance.

Labour Efficiency Variance

The difference between the actual labor hours used and the standard labor hours expected for the level of production achieved.

Variable Overhead

Indirect manufacturing costs that vary with the level of production output, such as utilities and maintenance expenses.

Labour Rate Variance

The difference between the actual cost of labor and its budgeted (or standard) cost, often arising from paying different wages than anticipated.