25 May WHICH OF THE FOLLOWING IS A COST ASSOCIATED WITH DECENTRALIZATION?
answer for the following questions.
1.
Which of the following is a cost associated with decentralization?
a.
Not enough time spent in gathering information about different subunits of the
organization
b.
Decreased loyalty toward the organization as a whole
c.
Focus manager’s attention on the subunit rather than the company as a
whole (pp.866 – cost of decentralization (2) unhealthy competition
d.
Lack of day-to-day involvement by top management in operating decisions
2.
A transfer-pricing method leads to goal congruence when managers:
a.
always act in their own best interest
b.
act in their own best interest and the decision is in the long-term best interest of
the manager’s subunit
c.
act in their own best interest and the decision is in the long-term best interest
of the company
(pp. 869 – align with the objectives of top management)
d.
act in their own best interest and the decision is in the short-term best interest of
the company
3.
In analyzing transfer prices, the:
a.
buyer will not willingly purchase a product for less than the incremental costs
incurred to manufacture the product internally
b.
seller will not willingly sell a product for less than the incremental costs
incurred to make the product
c.
buyer will willingly pay more than the ceiling transfer price
d.
buyer will not pay less than the ceiling transfer price
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