When Machine-Hours Are Used as a Cost-Allocation Base, the Item

question 117

Multiple Choice

When machine-hours are used as a cost-allocation base, the item most likely to contribute to an unfavorable variable overhead efficiency variance is:

• A)using more machine hours than budgeted
• B)workers wastefully using variable overhead items
• C)unused capacity
• D)more units being produced than planned

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Definitions:

Mechanistic Organizations

Organizations characterized by rigid hierarchies, fixed duties, and centralized decision-making.

Organic Organizations

Flexible and adaptive organizational structures that emphasize decentralization, employee empowerment, and the capacity to adjust rapidly to changes.

Future Organization

The conceptualization or design of organizational structures, cultures, and practices for adapting to expected future challenges and opportunities.

Organization Design

The process of structuring and arranging the components of a company or organization to achieve its objectives efficiently and effectively.