Exam 24: Budgetary Control and Responsibility Accounting

A cost is __________________ at a given level of managerial responsibility if a manager has the authority to incur the cost in a given time period.

Telemark Production's manufacturing costs for July when production was 2000 units appears below: Direct materials \ 10 per unit Factory depreciation \ 16,000 Variable overhead 10,000 Direct labor 4,000 Factory supervisory salaries 11,600 Other fixed factory costs 3,000 Instructions How much is the flexible budget manufacturing cost amount for a month when 2200 units are produced?

The current controllable margin for Henry Division is $93000. Its current operating assets are $300000. The division is considering purchasing equipment for $90000 that will increase annual controllable margin by an estimated $15000. If the equipment is purchased what will happen to the return on investment for Henry Division?

What is responsibility accounting? Explain the purpose of responsibility accounting.

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

If an investment center has generated a controllable margin of $150000 and sales of $600000 what is the return on investment for the investment center if average operating assets were $1000000 during the period?

A major element in budgetary control is

In the Dichter Co. indirect labor is budgeted for $72000 and factory supervision is budgeted for $24000 at normal capacity of 160000 direct labor hours. If 180000 direct labor hours are worked flexible budget total for these costs is

The master budget is a __________________ budget which is based on operating at one budgeted activity level.

A static budget is not appropriate in evaluating a manager's effectiveness if a company has

Hubbard Inc.'s static budget at 3000 units of production includes $12000 for direct labor $3000 for utilities (variable) and total fixed costs of $24000. Actual production and sales for the year was 9000 units with an actual cost of $70800. Instructions Determine if Hubbard is over or under budget.

The maintenance department of a manufacturing company is a(n)

Which of the following would not be considered an aspect of budgetary control?

Which one of the following would be the same total amount on a flexible budget and a static budget if the activity level is different for the two types of budgets?

A flexible budget

Flexible budgets are widely used in production and service departments.

Micro Miller Company's budgeted sales for April were estimated at $700000 sales commissions at 4% of sales and the sales manager's salary at $80000. Shipping expenses were estimated at 1% of sales and miscellaneous selling expenses were estimated at $1000 plus 0.5% of sales. Instructions Determine the budgeted selling expenses on a flexible budget for April.

Controllable costs for responsibility accounting purposes are those costs that are directly influenced by

A distinction should be made between controllable and noncontrollable costs when reporting information under responsibility accounting.

When budgeted and actual results are not the same amount there is a budget