Question 1

Controllable margin is defined as

Accepted Answer

A) sales minus variable costs. 
B) sales minus contribution margin. 
C) contribution margin less controllable fixed costs. 
D) contribution margin less noncontrollable fixed costs. 
A) sales minus variable costs. 
B) sales minus contribution margin. 
C) contribution margin less controllable fixed costs. 
D) contribution margin less noncontrollable fixed costs.

Question 2

An investment center generated a contribution margin of $400000 fixed costs of $200000 and sales of $2000000.The center's average operating assets were $800000.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 3

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 4

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 5

The master budget of Windy Co.shows that the planned activity level for next year is expected to be 50000 machine hours.At this level of activity the following manufacturing overhead costs are expected: $\begin{array}{lr}
\text { Indirect labor } & \$ 720,000 \
\text { Machine supplies } & 180,000 \
\text { Indirect materials } & 210,000 \
\text { Depreciation on factory building } & 150,000 \
\text { Total manufacturing overhead } & \$ 1,260,000
\end{array}$
 A flexible budget for a level of activity of 60000 machine hours would show total manufacturing overhead costs of

Accepted Answer

A) $1482000. 
B) $1260000. 
C) $1512000. 
D) $1362000. 
A) $1482000. 
B) $1260000. 
C) $1512000. 
D) $1362000.

Question 6

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 7

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 8

A master budget is most useful in evaluating a manager's performance in controlling costs.

Accepted Answer

A) True 
 B)False

Question 9

In the Goblette Manufacturing Company indirect labor is budgeted for $108000 and factory supervision is budgeted for $36000 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) $144000. 
B) $162000. 
C) $157500. 
D) $148500. 
A) $144000. 
B) $162000. 
C) $157500. 
D) $148500.

Question 10

A responsibility report should

Accepted Answer

A) be prepared in accordance with generally accepted accounting principles. 
B) show only those costs that a manager can control. 
C) only show variable costs. 
D) only be prepared at the highest level of managerial responsibility. 
A) be prepared in accordance with generally accepted accounting principles. 
B) show only those costs that a manager can control. 
C) only show variable costs. 
D) only be prepared at the highest level of managerial responsibility.

Question 11

Nikoto Steel Co.budgeted manufacturing costs for 50000 tons of steel are: $\begin{array}{llcc}
  \text {Fixed manufacturing costs  } & \text { $ \$ 50,000 $ per month }   \
 \text {Variable manufacturing costs  } & \text {$ \$ 12.00 $ per ton of steel  } \
\end{array}$

Nikoto produced 40000 tons of steel during March.How much is the flexible budget for total manufacturing costs for March?

Accepted Answer

A) $520000 
B) $650000 
C) $480000 
D) $530000 
A) $520000 
B) $650000 
C) $480000 
D) $530000

Question 12

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

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 13

A flexible budget can be prepared for each of the types of budgets included in the master budget.

Accepted Answer

A) True 
 B)False

Question 14

Performance reports for cost centers compare actual

Accepted Answer

A) total costs with static budget data. 
B) total costs with flexible budget data. 
C) controllable costs with static budget data. 
D) controllable costs with flexible budget data. 
A) total costs with static budget data. 
B) total costs with flexible budget data. 
C) controllable costs with static budget data. 
D) controllable costs with flexible budget data.

Question 15

Top management's reaction to a difference between budgeted and actual sales often depends on

Accepted Answer

A) whether the difference is favorable or unfavorable. 
B) whether management anticipated the difference. 
C) the materiality of the difference. 
D) the personality of the top managers. 
A) whether the difference is favorable or unfavorable. 
B) whether management anticipated the difference. 
C) the materiality of the difference. 
D) the personality of the top managers.

Question 16

Las Sendas Inc.had average operating assets of $4000000 and sales of $2000000 in 2022.If the controllable margin was $600000 the ROI was

Accepted Answer

A) 60% 
B) 50% 
C) 30% 
D) 15% 
A) 60% 
B) 50% 
C) 30% 
D) 15%

Question 17

Boland Manufacturing prepared a 2022 budget for 120000 units of product.Actual production in 2022 was 130000 units.To be most useful what amounts should a performance report for this company compare?

Accepted Answer

A) The actual results for 130000 units with the original budget for 120000 units. 
B) The actual results for 130000 units with a new budget for 130000 units. 
C) The actual results for 130000 units with last year's actual results for 134000 units. 
D) It doesn't matter.All of these choices are equally useful. 
A) The actual results for 130000 units with the original budget for 120000 units. 
B) The actual results for 130000 units with a new budget for 130000 units. 
C) The actual results for 130000 units with last year's actual results for 134000 units. 
D) It doesn't matter.All of these choices are equally useful.

Question 18

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 19

A company's planned activity level for next year is expected to be 100000 machine hours.At this level of activity the company budgeted the following manufacturing overhead costs: $\begin{array}{l}
\begin{array}{lr}
\quad\quad\quad\text { Variable }\
 \hline  \text { Indirect materials } & \$90,000 \
\text { Indirect labor } & 120,000 \
\text { Factory supplies } & 15,000
\end{array}\
\begin{array}{l}
\quad\quad\quad\quad\text { Fixed }\
\hline \text { Depreciation } & \$ 375000 \
\text { Taxes } & 7,500 \
\text { Supervision } & 30,000
\end{array}
\end{array}$ A flexible budget prepared at the 90000 machine hours level of activity would show total manufacturing overhead costs of

Accepted Answer

A) $202500. 
B) $270000. 
C) $277500. 
D) $225000. 
A) $202500. 
B) $270000. 
C) $277500. 
D) $225000.

Question 20

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?

Accepted Answer

A) An increase of 16.1% 
B) A decrease of 13.3% 
C) A decrease of 3.3% 
D) A decrease of 7.2% 
A) An increase of 16.1% 
B) A decrease of 13.3% 
C) A decrease of 3.3% 
D) A decrease of 7.2%

Controllable margin is defined as

An investment center generated a contribution margin of $400000 fixed costs of $200000 and sales of $2000000.The center's average operating assets were $800000.How much is the return on investment?

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?

Controllable margin is most useful for

Labor productivity

A master budget is most useful in evaluating a manager's performance in controlling costs.

In the Goblette Manufacturing Company indirect labor is budgeted for $108000 and factory supervision is budgeted for $36000 at normal capacity of 160000 direct labor hours.If 180000 direct labor hours are worked flexible budget total for these costs is:

A responsibility report should

Nikoto Steel Co.budgeted manufacturing costs for 50000 tons of steel are: Fixed manufacturing costs \ 50,000 per month Variable manufacturing costs \ 12.00 per ton of steel Nikoto produced 40000 tons of steel during March.How much is the flexible budget for total manufacturing costs for March?

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

A flexible budget can be prepared for each of the types of budgets included in the master budget.

Performance reports for cost centers compare actual

Top management's reaction to a difference between budgeted and actual sales often depends on

Las Sendas Inc.had average operating assets of $4000000 and sales of $2000000 in 2022.If the controllable margin was $600000 the ROI was

Boland Manufacturing prepared a 2022 budget for 120000 units of product.Actual production in 2022 was 130000 units.To be most useful what amounts should a performance report for this company compare?

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

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

Controllable margin is defined as

An investment center generated a contribution margin of $400000 fixed costs of $200000 and sales of $2000000.The center's average operating assets were $800000.How much is the return on investment?

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?

Controllable margin is most useful for

Labor productivity

A master budget is most useful in evaluating a manager's performance in controlling costs.

In the Goblette Manufacturing Company indirect labor is budgeted for $108000 and factory supervision is budgeted for $36000 at normal capacity of 160000 direct labor hours.If 180000 direct labor hours are worked flexible budget total for these costs is:

A responsibility report should

Nikoto Steel Co.budgeted manufacturing costs for 50000 tons of steel are: Fixed manufacturing costs \ 50,000 per month Variable manufacturing costs \ 12.00 per ton of steel Nikoto produced 40000 tons of steel during March.How much is the flexible budget for total manufacturing costs for March?

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

A flexible budget can be prepared for each of the types of budgets included in the master budget.

Performance reports for cost centers compare actual

Top management's reaction to a difference between budgeted and actual sales often depends on

Las Sendas Inc.had average operating assets of $4000000 and sales of $2000000 in 2022.If the controllable margin was $600000 the ROI was

Boland Manufacturing prepared a 2022 budget for 120000 units of product.Actual production in 2022 was 130000 units.To be most useful what amounts should a performance report for this company compare?

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

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