
Concept explainers
Concept Introduction:
Organizations today have grown manifold. Companies have grown tremendously, where operating them as a single unit is herculean task. Hence it is advisable to divide an organization into various departments based on the functions they perform for effective management and functioning.
Departmentalization enables division of work and each department shall have a manager responsible for that particular departmental function.
To determine: Reason for division of departments in an organization

Explanation of Solution
Following are the advantages of departmentalization:
• There is scope for specialization when a manager is engaged in a particular functional department. He would equip and excel in that functional area.
• When an organization is divided into departments, the administration process becomes easy. Each department can be given an objective or goal. Any deviation from the objective can be easily noticed in various departments.
• Each function is divided between the departments based on their nature. Each department manager will be held responsible for the functioning of their departments.
• The top management can easily communicate with the department heads and effectively convey their goals and take their suggestions in the decision-making process.
Division of departments ensures division of work. Every worker is instilled with the sense of process/job ownership. Also departmentalization promotes cross functioning and communication effective as no single department can work on its own without coordinating with others. Thus it ensures transparency and efficacy.
Thus the reason for division of departments in companies is explained.
Want to see more full solutions like this?
Chapter 24 Solutions
Fundamental Accounting Principles -Hardcover
- 4 POINTSarrow_forwardI am looking for the correct answer to this general accounting question with appropriate explanations.arrow_forwardValor Systems is considering a project that will produce incremental annual sales of $320,000 and increase cash expenses by $205,000. If the project is implemented, taxes will increase from $31,000 to $37,000. The company is debt-free. What is the amount of the operating cash flow using the top-down approach? Need helparrow_forward
- Hii! Please don't use ai to answerarrow_forwardSimba Pets uses the perpetual inventory system. At the beginning of the quarter, Simba Pets has $42,000 in inventory. During the quarter, the company purchased $9,200 of new inventory from a vendor, returned $1,500 of inventory to the vendor, and took advantage of discounts from the vendor of $300. At the end of the quarter, the balance in inventory is $34,500. What is the cost of goods sold? A. $15,500 B. $14,900 C. $13,500 D. $16,200arrow_forwardI need help solving this general accounting question with the proper methodology.arrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education





