The Akron Factory Employs Two Quality Control Inspectors at an Annual

question 41

Multiple Choice

The Akron factory employs two quality control inspectors at an annual salary of $70,000 each.These salaries should be classified as:

• A)Common fixed cost.
• B)Variable cost.
• C)Committed fixed cost.
• D)Controllable fixed cost.

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Definitions:

Centralization

The concentration of decision-making power and authority in the hands of a central body or a few individuals within an organization.

Formalization

The process of creating formal rules and procedures to standardize organizational activities and decisions.

Simple Structure

A term used in organizational theory referring to an organizational design with low departmentalization, wide spans of control, centralized authority, and minimal formalization.

Professional Bureaucracy

A decentralized form of organization that emphasizes the expertise of the professionals in the operating core of the organization.