When Top Managers Design an Organization's Structure and Establish a Chain

question 57

True/False

When top managers design an organization's structure and establish a chain of command, they are essentially creating ad hoc committees.

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Definitions:

Step-Variable Cost

Costs that remain fixed for a certain level of production or operations but can change in steps with significant changes in activity level.

True Variable Cost

Costs that vary directly with the level of production or service volume, such as raw materials and direct labor.

Mixed Cost

consists of both fixed and variable components and changes in total with the level of activity, but not proportionally.

Product Costs

Expenses directly linked to the production of a product, encompassing direct materials, direct labor, and manufacturing overhead costs.