Question 1

The denominator in the formula for return on investment calculation is

Accepted Answer

A) investment center controllable margin. 
B) dependent on the specific type of profit center. 
C) investment center average operating assets. 
D) sales for the period. 
A) investment center controllable margin. 
B) dependent on the specific type of profit center. 
C) investment center average operating assets. 
D) sales for the period.

Question 2

Another name for the static budget is

Accepted Answer

A) master budget. 
B) overhead budget. 
C) permanent budget. 
D) flexible budget. 
A) master budget. 
B) overhead budget. 
C) permanent budget. 
D) flexible budget.

Question 3

The master budget is not used in the budgetary control process.

Accepted Answer

A) True 
 B)False

Question 4

If controllable margin is $300,000 and the average investment center operating assets are $2,000,000, the return on investment is

Accepted Answer

A) .67%. 
B) 6.66%. 
C) 20%. 
D) 15%. 
A) .67%. 
B) 6.66%. 
C) 20%. 
D) 15%.

Question 5

Nikoto Steel Co. budgeted manufacturing costs for 50,000 tons of steel are: Fixed manufacturing costs $\quad \$ 50,000$ per month
Variable manufacturing costs $\quad \$ 12.00$ per ton of steel Nikoto produced 40,000 tons of steel during March. How much is the flexible budget for total manufacturing costs for March?

Accepted Answer

A) $520,000 
B) $650,000 
C) $480,000 
D) $530,000 
A) $520,000 
B) $650,000 
C) $480,000 
D) $530,000

Question 6

Given below is an excerpt from a management performance report: $\begin{array}{llll}&\text { Budget}&\text { Actual}&\text { Difference }\
\text { Contribution margin } & \$ 600,000 & \$ 580,000 & \$ 20,000 \mathrm{U} \
\text { Controllable fixed costs } & \$ 200,000 & \$ 220,000 & \$ 20,000 \mathrm{U}
\end{array}$ The manager's overall performance

Accepted Answer

A) is 10% above expectations. 
B) is 10% below expectations. 
C) is equal to expectations. 
D) cannot be determined from the information provided. 
A) is 10% above expectations. 
B) is 10% below expectations. 
C) is equal to expectations. 
D) cannot be determined from the information provided.

Question 7

Naples, Inc. recorded operating data for its shoe division for the year. $$\begin{array} { l r } 
\text { Sales } & \$ 750,000 \
\text { Contribution margin } & 135,000 \
\text { Total fixed costs } & 90,000 \
\text { Average total operating assets } & 300,000
\end{array}$$ How much is ROI for the year if management is able to identify a way to improve the contribution margin by $30,000, assuming fixed costs are held constant?

Accepted Answer

A) 25% 
B) 18% 
C) 45% 
D) 12% 
A) 25% 
B) 18% 
C) 45% 
D) 12%

Question 8

A formula used in developing a flexible budget is: Total budgeted cost = fixed cost + (total variable cost per unit × activity level).

Accepted Answer

A) True 
 B)False

Question 9

Controllable margin is most useful for

Accepted Answer

A) external financial reporting. 
B) preparing the master budget. 
C) performance evaluation of profit centers. 
D) break-even analysis. 
A) external financial reporting. 
B) preparing the master budget. 
C) performance evaluation of profit centers. 
D) break-even analysis.

Question 10

Assume that actual sales results exceed the planned results for the second quarter. This favorable difference is greater than the unfavorable difference reported for the first quarter sales. Which of the following statements about the sales budget report on June 30 is true?

Accepted Answer

A) The year-to-date results will show a favorable difference. 
B) The year-to-date results will show an unfavorable difference. 
C) The difference for the first quarter can be ignored. 
D) The sales report is not useful if it shows a favorable and unfavorable difference for the two quarters. 
A) The year-to-date results will show a favorable difference. 
B) The year-to-date results will show an unfavorable difference. 
C) The difference for the first quarter can be ignored. 
D) The sales report is not useful if it shows a favorable and unfavorable difference for the two quarters.

Question 11

In the Dichter Co., indirect labor is budgeted for $72,000 and factory supervision is budgeted for $24,000 at normal capacity of 160,000 direct labor hours. If 180,000 direct labor hours are worked, flexible budget total for these costs is

Accepted Answer

A) $96,000. 
B) $108,000. 
C) $105,000. 
D) $99,000. 
A) $96,000. 
B) $108,000. 
C) $105,000. 
D) $99,000.

Question 12

Which of the following is not a correct match?
1.	Incurs costs
2.	Generates revenue
3.	Controls investment funds

Accepted Answer

A) Investment Center 1, 2, 3 
B) Cost Center 1 
C) Profit Center 1, 2, 3 
D) All are correct matches. 
A) Investment Center 1, 2, 3 
B) Cost Center 1 
C) Profit Center 1, 2, 3 
D) All are correct matches.

Question 13

The accumulation of accounting data on the basis of the individual manager who has the authority to make day-to-day decisions about activities in an area is called

Accepted Answer

A) static reporting. 
B) flexible accounting. 
C) responsibility accounting. 
D) master budgeting. 
A) static reporting. 
B) flexible accounting. 
C) responsibility accounting. 
D) master budgeting.

Question 14

Chambers, Inc. uses flexible budgets. At normal capacity of 16,000 units, budgeted manufacturing overhead is: $64,000 variable and $180,000 fixed. If Chambers had actual overhead costs of $250,000 for 18,000 units produced, what is the difference between actual and budgeted costs?

Accepted Answer

A) $2,000 unfavorable. 
B) $2,000 favorable. 
C) $6,000 unfavorable. 
D) $8,000 favorable. 
A) $2,000 unfavorable. 
B) $2,000 favorable. 
C) $6,000 unfavorable. 
D) $8,000 favorable.

The denominator in the formula for return on investment calculation is

Another name for the static budget is

The master budget is not used in the budgetary control process.

If controllable margin is $300,000 and the average investment center operating assets are $2,000,000, the return on investment is

Given below is an excerpt from a management performance report: Budget Actual Difference Contribution margin \ 600,000 \ 580,000 \ 20,000 Controllable fixed costs \ 200,000 \ 220,000 \ 20,000 The manager's overall performance

A formula used in developing a flexible budget is: Total budgeted cost = fixed cost + (total variable cost per unit × activity level).

Controllable margin is most useful for

Assume that actual sales results exceed the planned results for the second quarter. This favorable difference is greater than the unfavorable difference reported for the first quarter sales. Which of the following statements about the sales budget report on June 30 is true?

In the Dichter Co., indirect labor is budgeted for $72,000 and factory supervision is budgeted for $24,000 at normal capacity of 160,000 direct labor hours. If 180,000 direct labor hours are worked, flexible budget total for these costs is

Which of the following is not a correct match? 1. Incurs costs 2. Generates revenue 3. Controls investment funds

The accumulation of accounting data on the basis of the individual manager who has the authority to make day-to-day decisions about activities in an area is called

Chambers, Inc. uses flexible budgets. At normal capacity of 16,000 units, budgeted manufacturing overhead is: $64,000 variable and $180,000 fixed. If Chambers had actual overhead costs of $250,000 for 18,000 units produced, what is the difference between actual and budgeted costs?

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing

Cost-Volume-Profit

Cost-Volume-Profit Analysis: Additional Issues

Incremental Analysis

Budgetary Planning

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Filters

Exam 21: Budgetary Control and Responsibility Accounting

The denominator in the formula for return on investment calculation is

Another name for the static budget is

The master budget is not used in the budgetary control process.

If controllable margin is $300,000 and the average investment center operating assets are $2,000,000, the return on investment is

Given below is an excerpt from a management performance report: Budget Actual Difference Contribution margin \ 600,000 \ 580,000 \ 20,000 Controllable fixed costs \ 200,000 \ 220,000 \ 20,000 The manager's overall performance

A formula used in developing a flexible budget is: Total budgeted cost = fixed cost + (total variable cost per unit × activity level).

Controllable margin is most useful for

Assume that actual sales results exceed the planned results for the second quarter. This favorable difference is greater than the unfavorable difference reported for the first quarter sales. Which of the following statements about the sales budget report on June 30 is true?

In the Dichter Co., indirect labor is budgeted for $72,000 and factory supervision is budgeted for $24,000 at normal capacity of 160,000 direct labor hours. If 180,000 direct labor hours are worked, flexible budget total for these costs is

Which of the following is not a correct match? 1. Incurs costs 2. Generates revenue 3. Controls investment funds

The accumulation of accounting data on the basis of the individual manager who has the authority to make day-to-day decisions about activities in an area is called

Chambers, Inc. uses flexible budgets. At normal capacity of 16,000 units, budgeted manufacturing overhead is: $64,000 variable and $180,000 fixed. If Chambers had actual overhead costs of $250,000 for 18,000 units produced, what is the difference between actual and budgeted costs?

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing

Cost-Volume-Profit

Cost-Volume-Profit Analysis: Additional Issues

Incremental Analysis

Budgetary Planning

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Filters