Functional Structures Are Usually Found in Organizations Where There

question 22

Multiple Choice

Functional structures are usually found in organizations where there

• A) is high volume production.
• B) are unrelated product lines or service offerings.
• C) is very little vertical integration.
• D) there exists a strong need to decentralize decision making.

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Definitions:

Overhead Application

The process of assigning overhead costs to specific cost objects such as products or departments.

Cost Distribution

The process of allocating indirect costs to different departments, projects, or products based on relevant criteria or drivers.

Cost Apportionment

The allocation of shared or indirect costs to different cost centers or cost objects based on a fair and reasonable basis.

Direct Method

A type of cost allocation that directly assigns expenses to specific cost objects, such as departments or products, without any intermediation.