When an Organization with a Functional Structure Diversifies into Related

question 59

Multiple Choice

When an organization with a functional structure diversifies into related product-markets,it generally

• A) maintains its functional structure.
• B) develops a divisional structure.
• C) develops a matrix structure.
• D) develops a worldwide product-division structure.

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Definitions:

Product Costs

Expenses directly incurred from the manufacturing of products, including direct materials, direct labor, and manufacturing overhead.

Manufacturing Margin

The difference between the sales revenue of manufactured goods and the cost of their direct materials and direct labor.

Variable Selling

Costs associated with selling a product that vary with the level of sales activity, such as commissions or shipping fees.

Administrative Expenses

These are the expenses that an organization incurs not directly tied to a specific function such as manufacturing, production, or sales.