Which One of the Following Will Not Occur in an Organization

question 57

Multiple Choice

Which one of the following will not occur in an organization that gives managers throughout the organization maximum freedom to make decisions? (CMA adapted)

• A) More effective solutions to operational problems.
• B) Individual managers regarding the managers of other segments as they do external parties.
• C) Two divisions of the organization having competing models that aim for the same market segments.
• D) Delays in securing approval for the introduction of new products.

Comprehend the concept and calculation of net realizable value in inventory valuation.

Recognize the requirements for including goods in inventory for different scenarios (consignments, goods in transit).

Understand the importance and components of inventory control systems, including physical counts and the use of internal documents.

Identify techniques for estimating inventory loss or in preparing financial statements without a full physical count.

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Definitions:

Sunk Cost

A cost that has already been incurred and cannot be recovered or changed.

Period Cost

Expenses on the income statement that are not directly tied to the production of goods, including sales, administration, and other overhead costs.

Opportunity Cost

The cost of foregone alternatives, representing the potential benefits an individual, investor, or business misses out on when choosing one alternative over another.

Conversion Costs

Expenses incurred in the process of converting raw materials into finished goods, including labor and manufacturing overhead.