Chapter 22 Quiz A consequence of a manager meeting her division’s pre-determined quarterly productio

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Chapter 22 Quiz

A consequence of a manager meeting her division’s pre-determined quarterly production goals could be:

a Shirking at the end of the quarter

b All of these choices

c A performance bonus

d A higher goal next quarter

A Cost Center is:

a Rewarded based on the lower the costs the division incurs

b Rewarded based on the higher profits of the company

c Rewarded based on the lower profits of the division

d Rewarded based on the higher profits of the division

A functional organization form is one in which divisions specialize by

a Tasks to be performed

b Customer type

c None of these choices

d Region in which they operate

A manager whose bonus is proportional to the number of distinct goals she achieves each quarter:

a All of these choices

b Will try to meet goals by a wide margin

c Will work equally hard to meet all goals

d Will decrease effort toward each goal as it becomes clear it will be met

A strength of a process team organization over a functional form organization is:

a Clear communications across divisions serving different consumer groups

b Clear responsibility for customer care throughout the production process

c Gains from having similar expertise within a division

d Clear promotion standards based on developing your specific skill set without regard to the other skills within a division

An process team organized firm is one in which divisions specialize by

a BOTH the region in which they operate AND customer type

b Region in which they operate

c Tasks to be performed

d Customer type

Conflicts exist between divisions because

a The person making the production decisions for an intermediate good does not care how they affect other divisions

b Divisions may place unreasonable demands on intermediate good quality

c All of these choices

d Divisions may not agree on the transfer price to be charged between divisions

Ideally, transfer prices would be set at:

a Average variable cost

b Marginal Cost

c The cost of purchasing something similar from outside

d Average cost

If the transfer price is set too low:

a Downstream divisions may unprofitably purchase from outside suppliers

b Upstream divisions may be compensated too much

c Upstream divisions may produce too few units of the intermediate good

d Downstream divisions may demand too little of the intermediate good

Profit Centers are:

a Rewarded based on the higher profits of the division

b Rewarded based on the lower profits of the division

c Rewarded based on the higher profits of the company

d Rewarded based on the lower the costs the division incurs

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