Question 1

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

Accepted Answer

A) segment. 
B) profit center. 
C) cost center. 
D) investment center. 
A) segment. 
B) profit center. 
C) cost center. 
D) investment center.

Question 2

Shane Industries prepared a fixed budget of 60000 direct labor hours with estimated overhead costs of $300000 for variable overhead and $90000 for fixed overhead.Shane then prepared a flexible budget at 57000 labor hours.How much is total overhead costs at this level of activity?

Accepted Answer

A) $285000 
B) $375000 
C) $370500 
D) $390000 
A) $285000 
B) $375000 
C) $370500 
D) $390000

Question 3

Not-for-profit entities

Accepted Answer

A) do not use responsibility accounting. 
B) utilize responsibility accounting in trying to maximize net income. 
C) utilize responsibility accounting in trying to minimize the cost of providing services. 
D) have only noncontrollable costs. 
A) do not use responsibility accounting. 
B) utilize responsibility accounting in trying to maximize net income. 
C) utilize responsibility accounting in trying to minimize the cost of providing services. 
D) have only noncontrollable costs.

Question 4

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 5

The purpose of the departmental overhead cost report is to

Accepted Answer

A) control indirect labor costs. 
B) control selling expense. 
C) determine the efficient use of materials. 
D) control overhead costs. 
A) control indirect labor costs. 
B) control selling expense. 
C) determine the efficient use of materials. 
D) control overhead costs.

Question 6

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

Accepted Answer

A) substantial fixed costs. 
B) substantial variable costs. 
C) planned activity levels that match actual activity levels. 
D) no variable costs. 
A) substantial fixed costs. 
B) substantial variable costs. 
C) planned activity levels that match actual activity levels. 
D) no variable costs.

Question 7

Power Manufacturing recorded operating data for its shoe division for the year. $\begin{array} { l r } 
\text { Sales } & \$ 1,500,000 \
\text { Contribution margin } & 300,000 \
\text { Controllable fixed costs } & 180,000 \
\text { Average total operating assets } & 600,000
\end{array}$ How much is controllable margin for the year?

Accepted Answer

A) 20% 
B) 50% 
C) $300000 
D) $120000 
A) 20% 
B) 50% 
C) $300000 
D) $120000

Question 8

The terms "direct fixed costs" and "indirect fixed costs" are synonymous with "traceable costs" and "common costs" respectively.

Accepted Answer

A) True 
 B)False

Question 9

Management by exception

Accepted Answer

A) is most effective at top levels of management. 
B) can be implemented at each level of responsibility within an organization. 
C) can only be applied when comparing actual results with the master budget. 
D) is the opposite of goal congruence. 
A) is most effective at top levels of management. 
B) can be implemented at each level of responsibility within an organization. 
C) can only be applied when comparing actual results with the master budget. 
D) is the opposite of goal congruence.

Question 10

Management by exception

Accepted Answer

A) causes managers to be buried under voluminous paperwork. 
B) means that all differences will be investigated. 
C) means that only unfavorable differences will be investigated. 
D) means that material differences will be investigated. 
A) causes managers to be buried under voluminous paperwork. 
B) means that all differences will be investigated. 
C) means that only unfavorable differences will be investigated. 
D) means that material differences will be investigated.

Question 11

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.

Question 12

A flexible budget is prepared before the master budget.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) $96000. 
B) $108000. 
C) $105000. 
D) $99000. 
A) $96000. 
B) $108000. 
C) $105000. 
D) $99000.

Question 14

Total budgeted fixed costs appearing on a flexible budget will be the same amount as total fixed costs on the master budget.

Accepted Answer

A) True 
 B)False

Question 15

A flexible budget is a series of static budgets at different levels of activities.

Accepted Answer

A) True 
 B)False

Question 16

Griffin Corp.is evaluating its Piquette division an investment center.The division has a $60000 controllable margin and $400000 of sales.How much will Griffin's average operating assets be when its return on investment is 10%?

Accepted Answer

A) $600000 
B) $660000 
C) $400000 
D) $340000 
A) $600000 
B) $660000 
C) $400000 
D) $340000

Question 17

The area manager of the Red White and Brew Restaurants is considering two possible expansion alternatives.The required investments expected controllable margins and the ROIs of each are as follows: $\begin{array}{ll}
\underline{\text { Project }}&\underline{\text { Investment }}&\underline{\text { Controllable Margin}}&\underline{\text { ROl}} \
 \text { Phoenix } & \$ 120,000&\$30,000&25\%\
\text { Chicago } & \$ 540,000&\$540,000&9.25\%
\end{array}$ The Red White and Brew segment has currently $2000000 in invested capital and a controllable margin of $250000.Which one of following projects will increase the Red White and Brew division's ROI?

Accepted Answer

A) Both the Phoenix and Chicago options 
B) Only the Phoenix option 
C) Only the Chicago option 
D) Neither the Phoenix nor the Chicago options 
A) Both the Phoenix and Chicago options 
B) Only the Phoenix option 
C) Only the Chicago option 
D) Neither the Phoenix nor the Chicago options

Question 18

What is the primary difference between a static budget and a flexible budget?

Accepted Answer

A) The static budget contains only fixed costs while the flexible budget contains only variable costs. 
B) The static budget is prepared for a single level of activity while a flexible budget is adjusted for different activity levels. 
C) The static budget is constructed using input from only upper level management while a flexible budget obtains input from all levels of management. 
D) The static budget is prepared only for units produced while a flexible budget reflects the number of units sold. 
A) The static budget contains only fixed costs while the flexible budget contains only variable costs. 
B) The static budget is prepared for a single level of activity while a flexible budget is adjusted for different activity levels. 
C) The static budget is constructed using input from only upper level management while a flexible budget obtains input from all levels of management. 
D) The static budget is prepared only for units produced while a flexible budget reflects the number of units sold.

Question 19

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 20

A flexible budget report will show both actual and budget cost based on the actual activity level achieved.

Accepted Answer

A) True 
 B)False

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

Shane Industries prepared a fixed budget of 60000 direct labor hours with estimated overhead costs of $300000 for variable overhead and $90000 for fixed overhead.Shane then prepared a flexible budget at 57000 labor hours.How much is total overhead costs at this level of activity?

Not-for-profit entities

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

The purpose of the departmental overhead cost report is to

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

Power Manufacturing recorded operating data for its shoe division for the year. Sales \ 1,500,000 Contribution margin 300,000 Controllable fixed costs 180,000 Average total operating assets 600,000 How much is controllable margin for the year?

The terms "direct fixed costs" and "indirect fixed costs" are synonymous with "traceable costs" and "common costs" respectively.

Management by exception

Management by exception

The purpose of the sales budget report is to

A flexible budget is prepared before the master budget.

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

Total budgeted fixed costs appearing on a flexible budget will be the same amount as total fixed costs on the master budget.

A flexible budget is a series of static budgets at different levels of activities.

Griffin Corp.is evaluating its Piquette division an investment center.The division has a $60000 controllable margin and $400000 of sales.How much will Griffin's average operating assets be when its return on investment is 10%?

What is the primary difference between a static budget and a flexible budget?

Another name for the static budget is

A flexible budget report will show both actual and budget cost based on the actual activity level achieved.

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Fraud, Internal Control, and Cash

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities and Stockholders Equity

Financial Analysis: the Big Picture

Managerial Accounting

Cost-Volume-Profit

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Activity Based Costing

Cost-Volume Profit Analysis: Additional Issues

Filters

Exam 15: Planning for Capital Investments

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

Shane Industries prepared a fixed budget of 60000 direct labor hours with estimated overhead costs of $300000 for variable overhead and $90000 for fixed overhead.Shane then prepared a flexible budget at 57000 labor hours.How much is total overhead costs at this level of activity?

Not-for-profit entities

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

The purpose of the departmental overhead cost report is to

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

Power Manufacturing recorded operating data for its shoe division for the year. Sales \ 1,500,000 Contribution margin 300,000 Controllable fixed costs 180,000 Average total operating assets 600,000 How much is controllable margin for the year?

The terms "direct fixed costs" and "indirect fixed costs" are synonymous with "traceable costs" and "common costs" respectively.

Management by exception

Management by exception

The purpose of the sales budget report is to

A flexible budget is prepared before the master budget.

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

Total budgeted fixed costs appearing on a flexible budget will be the same amount as total fixed costs on the master budget.

A flexible budget is a series of static budgets at different levels of activities.

Griffin Corp.is evaluating its Piquette division an investment center.The division has a $60000 controllable margin and $400000 of sales.How much will Griffin's average operating assets be when its return on investment is 10%?

What is the primary difference between a static budget and a flexible budget?

Another name for the static budget is

A flexible budget report will show both actual and budget cost based on the actual activity level achieved.

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Fraud, Internal Control, and Cash

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities and Stockholders Equity

Financial Analysis: the Big Picture

Managerial Accounting

Cost-Volume-Profit

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Activity Based Costing

Cost-Volume Profit Analysis: Additional Issues

Filters