Which of the Following Is Not a Cost of Decentralization

question 39

Multiple Choice

Which of the following is not a cost of decentralization?

• A)Managers in a decentralized organization might have a narrow focus on their own unit's performance rather than the attainment of their organization's overall goals.
• B)Managers might have a tendency to ignore the consequences of their actions on the organization's other subunits.
• C)Delegating decision making to the lowest level possible enables an organization to respond in a timely way to opportunities and problems.
• D)Managers in a decentralized organization might have a narrow focus on their own unit's performance rather than the attainment of their organization's overall goals AND managers might have a tendency to ignore the consequences of their actions on the organization's other subunits.

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Definitions:

Operating Income

A measure of a company's profitability from its regular business operations, excluding income and expenses from unusual or non-operational activities.

Absorption Costing

An accounting method that includes all manufacturing costs (both fixed and variable) in the cost of a product.

Operating Income

Earnings from a company's core business operations, excluding expenses and revenues from investments and other non-operational activities.

Variable Costing

An accounting method that only allocates variable production costs to products, excluding fixed costs.