An Organization with Departmentalization That Groups Units Around Products, Customers

question 11

Multiple Choice

An organization with departmentalization that groups units around products, customers, or geographic regions is called a

• A)divisional organization.
• B)centralized organization.
• C)conglomerate organization.
• D)functional organization.
• E)virtual organization.

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Definitions:

Direct Labor Standards

The benchmarks set for the cost and amount of direct labor needed to produce a product or service, used for budgeting and performance evaluations.

Actual Direct Labor Cost

The total expense of labor directly involved in the manufacturing of a product, excluding indirect costs such as supervisory personnel.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the expected (or standard) variable overhead based on the actual level of activity.

Variable Overhead

Costs that fluctuate with production output levels, such as utilities or indirect materials, but are not directly tied to specific units produced.