Conflicts can arise between divisions because
a. Coordination between divisions does not benefit all divisions equally
b. managers of profit centers care too little about the effects of their decisions on other divisions
c. managers are rewarded only for actions that increase their own divisional profit regardless of their effects on other divisions
d. all of the above
QUESTION 2The ability to lower the average costs of production for one product is possible with
a. Economies of scale
b. Economies of Scope
c. Diseconomies of Scale
d. Diseconomies of Scope
QUESTION 3Identify the reasons why the quantity demanded of a product increases as the price of that product decreases.
a. as the price declines, the real income of the consumer increases
b. as the price of product A declines, it makes it more attractive than product B
c. as the price declines, the consumer will always demand more on each successive price reduction
d. a and b
e. a and c
QUESTION 4Managers of profit centers earn more when their divisions
a. increase their sales and increase their costs
b. decrease their sales and increase their costs
c. decrease the costs of the components for which they are responsible
d. increase the costs of the components for which they are responsible
QUESTION 5As table manufacturing company produces more tables, the average total cost of each table produced increases. This is because:
a. Total fixed costs are decreasing as more tables are produced
b. There is economies of scale
c. There is diseconomies of scale
d. Total variable cost is decreasing as more clubs are produced.
QUESTION 6Which of the following best represents management's objective(s) in utilizing demand analysis?
a. it provides insights necessary for the effective manipulation of demand
b. it helps to measure the efficiency of the use of company resources
c. it aids in the forecasting of sales and revenues
d. a and b
e. a and c
QUESTION 7A cost center is
a. evaluated based on minimizing costs within the division
b. evaluated based on maximizing costs within the division
c. evaluated based on minimizing profits generated by the division
d. evaluated based on maximizing profits generated by the division
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