What is a modular organization? Briefly identify the advantages and disadvantages associated with this organizational form
Except for the core business activities that they can perform better, faster, and cheaper than others, modular organizations outsource all remaining business activities to outside companies, suppliers, specialists, or consultants. The term "modular" is used because the business activities purchased from outside companies can be added and dropped as needed. Advantages of modular organizations include being less expensive to run and being able to focus on the core activities that they do best. Disadvantages include requirement that relationships with reliable suppliers and vendors be extremely close, potential loss of control, and the threat of creating new competitors if the wrong business activities are outsourced.
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The following information relates to Carried Away Hot Air Balloons, Inc
Advertising Costs $10,400 Sales Salary 13,800 Sales Revenue 630,000 President's Salary 52,000 Office Rent 67,000 Manufacturing Equipment Depreciation 3,000 Indirect Materials Used 6,600 Indirect Labor 13,300 Factory Repair and Maintenance 820 Direct Materials Used 31,070 Direct Labor 31,900 Delivery Vehicle Depreciation 810 Administrative Salaries 24,700 How much was Carried Away's manufacturing overhead? A) $19,900 B) $20,720 C) $23,720 D) $62,970
Product differentiation and brand loyalty "raise the bar" for would-be industry entrants who would be required to make minimal investments in research or advertising
Indicate whether the statement is true or false