What Is the Major Disadvantage of Centralization

question 26

Multiple Choice

What is the major disadvantage of centralization?

• A) Different merchandise in each store
• B) Increased overhead expenses
• C) The need to have standardized operating policies
• D) The inability to quickly respond to changes in local markets
• E) The inability to use national advertising media

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Definitions:

Process Costing

An accounting methodology applied when identical units are mass produced, assigning average costs to each unit, simplifying the costing process.

Materials Costs

The cost incurred by a company to purchase, handle, and store raw materials used in the production of goods, often comprising a significant portion of total production cost.

Equivalent Units

A method used in process costing that converts partially completed goods into a number of completed units of output.

Assembly Department

An area in a manufacturing plant where parts are put together to create finished goods.