Question 1

A flexible budget depicted graphically

Accepted Answer

A) is identical to a CVP graph. 
B) differs from a CVP graph in the way that fixed costs are shown. 
C) differs from a CVP graph in the way that variable costs are shown. 
D) differs from a CVP graph in that sales revenue is not shown. 
A) is identical to a CVP graph. 
B) differs from a CVP graph in the way that fixed costs are shown. 
C) differs from a CVP graph in the way that variable costs are shown. 
D) differs from a CVP graph in that sales revenue is not shown.

Question 2

Pippen Co.recorded operating data for its shoe division for the year.The company's desired return is 5%. $\begin{array}{lr}
\text { Sales } & \$ 1,000,000 \
\text { Contribution margin } & 200,000 \
\text { Total direct fixed costs } & 120,000 \
\text { Average total operating assets } & 400,000
\end{array}$ Which one of the following reflects the controllable margin for the year?

Accepted Answer

A) 20% 
B) 50% 
C) $60,000 
D) $80,000 
A) 20% 
B) 50% 
C) $60,000 
D) $80,000

Question 3

The activity index used in preparing a flexible budget should not influence the variable costs that are being budgeted.

Accepted Answer

A) True 
 B)False

Question 4

Monte, Inc.recorded operating data for its Sandtrap division for the year.Monte requires its return to be 9%. $\begin{array}{lr}
\text { Sales } & \$ 1,000,000 \
\text { Controllable margin } & 180,000 \
\text { Total average assets } & 600,000 \
\text { Fixed costs } & 60,000
\end{array}$ How much is ROI for the year?

Accepted Answer

A) 10% 
B) 17% 
C) 20% 
D) 30% 
A) 10% 
B) 17% 
C) 20% 
D) 30%

Question 5

Smart Manufacturing budgeted costs for 50,000 linear feet of block are: Fixed manufacturing costs$\quad\$ 24,000$ per month
Variable manufacturing costs$\quad\$ 16.00$ per linear foot Smart installed 40,000 linear feet of block during March.How much is budgeted total manufacturing costs in March?

Accepted Answer

A) $640,000 
B) $824,000 
C) $800,000 
D) $664,000 
A) $640,000 
B) $824,000 
C) $800,000 
D) $664,000

Question 6

The foreign subsidiary of a large corporation is

Accepted Answer

A) not a responsibility center. 
B) a profit center. 
C) a cost center. 
D) an investment center. 
A) not a responsibility center. 
B) a profit center. 
C) a cost center. 
D) an investment center.

Question 7

In a responsibility accounting reporting system, as one moves up each level of responsibility in an organization, the responsibility reports become more summarized and show less detailed information.

Accepted Answer

A) True 
 B)False

Question 8

Under management by exception, which differences between planned and actual results should be investigated?

Accepted Answer

A) Material and noncontrollable 
B) Controllable and noncontrollable 
C) Material and controllable 
D) All differences should be investigated 
A) Material and noncontrollable 
B) Controllable and noncontrollable 
C) Material and controllable 
D) All differences should be investigated

Question 9

The flexible budget report evaluates a manager's performance in two areas: (1) production and (2) costs.

Accepted Answer

A) True 
 B)False

Question 10

In the formula for ROI, idle plant assets are

Accepted Answer

A) included in the calculation of controllable margin. 
B) included in the calculation of operating assets. 
C) excluded in the calculation of operating assets. 
D) excluded from total assets. 
A) included in the calculation of controllable margin. 
B) included in the calculation of operating assets. 
C) excluded in the calculation of operating assets. 
D) excluded from total assets.

Question 11

A static budget is an effective means to evaluate a manager's ability to control costs, regardless of the actual activity level.

Accepted Answer

A) True 
 B)False

Question 12

Which responsibility centers generate both revenues and costs?

Accepted Answer

A) Investment and profit centers 
B) Profit and cost centers 
C) Cost and investment centers 
D) Only profit centers 
A) Investment and profit centers 
B) Profit and cost centers 
C) Cost and investment centers 
D) Only profit centers

Question 13

Which of the following are financial measures of performance?
1.	Controllable margin
2.	Product quality
3.	Labor productivity

Accepted Answer

A) 1 
B) 2 
C) 3 
D) 1 and 3 
A) 1 
B) 2 
C) 3 
D) 1 and 3

Question 14

Flexible budgets are widely used in production and service departments.

Accepted Answer

A) True 
 B)False

Question 15

Costs incurred indirectly and allocated to a responsibility level are considered to be

Accepted Answer

A) nonmaterial. 
B) mixed. 
C) controllable. 
D) noncontrollable. 
A) nonmaterial. 
B) mixed. 
C) controllable. 
D) noncontrollable.

Question 16

Trails and Paths, Inc.had average operating assets of $6,000,000 and sales of $3,000,000 in 2016.If the controllable margin was $600,000, the ROI was

Accepted Answer

A) 50% 
B) 40% 
C) 20% 
D) 10% 
A) 50% 
B) 40% 
C) 20% 
D) 10%

Question 17

A static budget

Accepted Answer

A) should not be prepared in a company. 
B) is useful in evaluating a manager's performance by comparing actual variable costs and planned variable costs. 
C) shows planned results at the original budgeted activity level. 
D) is changed only if the actual level of activity is different than originally budgeted. 
A) should not be prepared in a company. 
B) is useful in evaluating a manager's performance by comparing actual variable costs and planned variable costs. 
C) shows planned results at the original budgeted activity level. 
D) is changed only if the actual level of activity is different than originally budgeted.

Question 18

Which of the following will not result in an unfavorable controllable margin difference?

Accepted Answer

A) Sales exceeding budget; costs under budget 
B) Sales exceeding budget; costs over budget 
C) Sales under budget; costs under budget 
D) Sales under budget; costs over budget 
A) Sales exceeding budget; costs under budget 
B) Sales exceeding budget; costs over budget 
C) Sales under budget; costs under budget 
D) Sales under budget; costs over budget

Question 19

An investment center generated a contribution margin of $400,000, fixed costs of $200,000 and sales of $2,000,000.The center's average operating assets were $800,000.How much is the return on investment?

Accepted Answer

A) 25% 
B) 175% 
C) 50% 
D) 75% 
A) 25% 
B) 175% 
C) 50% 
D) 75%

Question 20

The purpose of the sales budget report is to

Accepted Answer

A) control selling expenses. 
B) determine whether income objectives are being met. 
C) determine whether sales goals are being met. 
D) control sales commissions. 
A) control selling expenses. 
B) determine whether income objectives are being met. 
C) determine whether sales goals are being met. 
D) control sales commissions.

A flexible budget depicted graphically

Pippen Co.recorded operating data for its shoe division for the year.The company's desired return is 5%. Sales \ 1,000,000 Contribution margin 200,000 Total direct fixed costs 120,000 Average total operating assets 400,000 Which one of the following reflects the controllable margin for the year?

The activity index used in preparing a flexible budget should not influence the variable costs that are being budgeted.

Monte, Inc.recorded operating data for its Sandtrap division for the year.Monte requires its return to be 9%. Sales \ 1,000,000 Controllable margin 180,000 Total average assets 600,000 Fixed costs 60,000 How much is ROI for the year?

Smart Manufacturing budgeted costs for 50,000 linear feet of block are: Fixed manufacturing costs $\quad\$ 24,000$ per month Variable manufacturing costs $\quad\$ 16.00$ per linear foot Smart installed 40,000 linear feet of block during March.How much is budgeted total manufacturing costs in March?

The foreign subsidiary of a large corporation is

In a responsibility accounting reporting system, as one moves up each level of responsibility in an organization, the responsibility reports become more summarized and show less detailed information.

Under management by exception, which differences between planned and actual results should be investigated?

The flexible budget report evaluates a manager's performance in two areas: (1) production and (2) costs.

In the formula for ROI, idle plant assets are

A static budget is an effective means to evaluate a manager's ability to control costs, regardless of the actual activity level.

Which responsibility centers generate both revenues and costs?

Which of the following are financial measures of performance? 1. Controllable margin 2. Product quality 3. Labor productivity

Flexible budgets are widely used in production and service departments.

Costs incurred indirectly and allocated to a responsibility level are considered to be

Trails and Paths, Inc.had average operating assets of $6,000,000 and sales of $3,000,000 in 2016.If the controllable margin was $600,000, the ROI was

A static budget

Which of the following will not result in an unfavorable controllable margin difference?

An investment center generated a contribution margin of $400,000, fixed costs of $200,000 and sales of $2,000,000.The center's average operating assets were $800,000.How much is the return on investment?

The purpose of the sales budget report is to

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

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 Stockholders Equity

Statement of Cash Flows

Financial Analysis: the Big Picture

Managerial Accounting

Time Value of Money

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Exam 10: Reporting and Analyzing Liabilities

A flexible budget depicted graphically

Pippen Co.recorded operating data for its shoe division for the year.The company's desired return is 5%. Sales \ 1,000,000 Contribution margin 200,000 Total direct fixed costs 120,000 Average total operating assets 400,000 Which one of the following reflects the controllable margin for the year?

The activity index used in preparing a flexible budget should not influence the variable costs that are being budgeted.

Monte, Inc.recorded operating data for its Sandtrap division for the year.Monte requires its return to be 9%. Sales \ 1,000,000 Controllable margin 180,000 Total average assets 600,000 Fixed costs 60,000 How much is ROI for the year?

The foreign subsidiary of a large corporation is

In a responsibility accounting reporting system, as one moves up each level of responsibility in an organization, the responsibility reports become more summarized and show less detailed information.

Under management by exception, which differences between planned and actual results should be investigated?

The flexible budget report evaluates a manager's performance in two areas: (1) production and (2) costs.

In the formula for ROI, idle plant assets are

A static budget is an effective means to evaluate a manager's ability to control costs, regardless of the actual activity level.

Which responsibility centers generate both revenues and costs?

Which of the following are financial measures of performance? 1. Controllable margin 2. Product quality 3. Labor productivity

Flexible budgets are widely used in production and service departments.

Costs incurred indirectly and allocated to a responsibility level are considered to be

Trails and Paths, Inc.had average operating assets of $6,000,000 and sales of $3,000,000 in 2016.If the controllable margin was $600,000, the ROI was

A static budget

Which of the following will not result in an unfavorable controllable margin difference?

An investment center generated a contribution margin of $400,000, fixed costs of $200,000 and sales of $2,000,000.The center's average operating assets were $800,000.How much is the return on investment?

The purpose of the sales budget report is to

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

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 Stockholders Equity

Statement of Cash Flows

Financial Analysis: the Big Picture

Managerial Accounting

Time Value of Money

Filters