Use the Table for the Question(s) Below

question 86

Multiple Choice

Use the table for the question(s) below.
Income Statement for Xenon Manufacturing:
Selling, general,
Earnings before interest

-Consider the above Income Statement for Xenon Manufacturing. All values are in millions of dollars. Calculate the operating margin for 2008 and 2009. What does the change in the operating margin between these two years imply about the company?

• A) The efficiency of Xenon Manufacturing has significantly risen between 2008 and 2009.
• B) The ability of Xenon Manufacturing to sell its goods and services for more than the costs of producing them rose between 2008 and 2009.
• C) The efficiency of Xenon Manufacturing has significantly fallen between 2008 and 2009.
• D) The leverage of Xenon Manufacturing fell slightly between 2008 and 2009.

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Definitions:

Machine Bureaucracy

A moderately decentralized form of organization that emphasizes support staff differentiated from the line operations of the organization, limited horizontal decentralization of decision making, and a well-defined hierarchy of authority.

Adhocracy

A selectively decentralized form of organization that emphasizes the support staff and mutual adjustment among people.

Adhocracy

An organizational structure that is flexible, non-hierarchical, and adaptable, often employed to spur innovation and adapt quickly to changes.

Centralization

The process of concentrating control and decision-making authority within a centralized group or location, often at the top levels of organizational hierarchy.