Question 1

is governed by generally accepted accounting principles.

Accepted Answer

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

Question 2

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 3

What budgeted amounts appear on the flexible budget?

Accepted Answer

A) Original budgeted amounts at the static budget activity level 
B) Actual costs for the budgeted activity level 
C) Budgeted amounts for the actual activity level achieved 
D) Actual costs for the estimated activity level 
A) Original budgeted amounts at the static budget activity level 
B) Actual costs for the budgeted activity level 
C) Budgeted amounts for the actual activity level achieved 
D) Actual costs for the estimated activity level

Question 4

A flexible budget can be prepared for which of the following budgets comprising the master budget?

Accepted Answer

A) Sales 
B) Overhead 
C) Direct materials 
D) All of these answers are correct. 
A) Sales 
B) Overhead 
C) Direct materials 
D) All of these answers are correct.

Question 5

The comparison of differences between actual and planned results

Accepted Answer

A) is done by the external auditors. 
B) appears on the company's external financial statements. 
C) is usually done orally in departmental meetings. 
D) appears on periodic budget reports. 
A) is done by the external auditors. 
B) appears on the company's external financial statements. 
C) is usually done orally in departmental meetings. 
D) appears on periodic budget reports.

Question 6

A static budget is appropriate in evaluating a manager's performance if

Accepted Answer

A) actual activity closely approximates the master budget activity. 
B) actual activity is less than the master budget activity. 
C) the company prepares reports on an annual basis. 
D) the company is a not-for-profit organization. 
A) actual activity closely approximates the master budget activity. 
B) actual activity is less than the master budget activity. 
C) the company prepares reports on an annual basis. 
D) the company is a not-for-profit organization.

Question 7

Cost centers profit centers and investment centers can all be classified as responsibility centers.

Accepted Answer

A) True 
 B)False

Question 8

The dollar amount of the controllable margin

Accepted Answer

A) is usually higher than the contribution margin. 
B) is usually lower than the contribution margin. 
C) is always equal to the contribution margin. 
D) cannot be a negative figure. 
A) is usually higher than the contribution margin. 
B) is usually lower than the contribution margin. 
C) is always equal to the contribution margin. 
D) cannot be a negative figure.

Question 9

Policies regarding when a difference between actual and planned results should be investigated are generally more restrictive for noncontrollable items than for controllable items.

Accepted Answer

A) True 
 B)False

Question 10

Certain budget reports are prepared monthly whereas others are prepared more frequently depending on the activities being monitored.

Accepted Answer

A) True 
 B)False

Question 11

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 12

The formula for computing return on investment is controllable margin divided by average operating assets.

Accepted Answer

A) True 
 B)False

Question 13

Rhein Manufacturing recorded operating data for its auto accessories division for the year. $\begin{array} { l r } 
\text { Sales } & \$ 750,000 \
\text { Contribution margin } & 150,000 \
\text { Total direct fixed costs } & 90,000 \
\text { Average total operating assets } & 400,000
\end{array}$ How much is ROI for the year if management is able to identify a way to improve the contribution margin by $30000 assuming fixed costs are held constant?

Accepted Answer

A) 45.0% 
B) 22.5% 
C) 15.0% 
D) 12.0% 
A) 45.0% 
B) 22.5% 
C) 15.0% 
D) 12.0%

Question 14

The linens department of a large department store 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 15

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

Accepted Answer

A) True 
 B)False

Question 16

Budget reports comparing actual results with planned objectives should be prepared only once a year.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is not a true statement?

Accepted Answer

A) All costs are controllable at some level within a company. 
B) Responsibility accounting applies to both profit and not-for-profit entities. 
C) Fewer costs are controllable as one moves up to each higher level of managerial responsibility. 
D) The term segment is sometimes used to identify areas of responsibility in decentralized operations. 
A) All costs are controllable at some level within a company. 
B) Responsibility accounting applies to both profit and not-for-profit entities. 
C) Fewer costs are controllable as one moves up to each higher level of managerial responsibility. 
D) The term segment is sometimes used to identify areas of responsibility in decentralized operations.

Question 18

Smart Manufacturing budgeted costs for 50000 linear feet of block are: $\begin{array}{llcc}
  \text {  Fixed manufacturing costs} &  \text {$ \$ 24,000 $ per month  }  \
 \text { Variable manufacturing costs } & \text { 
$ \$ 16.00 $ per linear foot } \
\end{array}$

Smart installed 40000 linear feet of block during March.How much is budgeted total manufacturing costs in March?

Accepted Answer

A) $640000 
B) $824000 
C) $800000 
D) $664000 
A) $640000 
B) $824000 
C) $800000 
D) $664000

Question 19

If actual results are different from planned results the difference must always be investigated by management to achieve effective budgetary control.

Accepted Answer

A) True 
 B)False

Question 20

Budget reports should be prepared

Accepted Answer

A) daily. 
B) monthly. 
C) weekly. 
D) as frequently as needed. 
A) daily. 
B) monthly. 
C) weekly. 
D) as frequently as needed.

is governed by generally accepted accounting principles.

Controls investment funds

What budgeted amounts appear on the flexible budget?

A flexible budget can be prepared for which of the following budgets comprising the master budget?

The comparison of differences between actual and planned results

A static budget is appropriate in evaluating a manager's performance if

Cost centers profit centers and investment centers can all be classified as responsibility centers.

The dollar amount of the controllable margin

Policies regarding when a difference between actual and planned results should be investigated are generally more restrictive for noncontrollable items than for controllable items.

Certain budget reports are prepared monthly whereas others are prepared more frequently depending on the activities being monitored.

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

The formula for computing return on investment is controllable margin divided by average operating assets.

The linens department of a large department store is

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

Budget reports comparing actual results with planned objectives should be prepared only once a year.

Which of the following is not a true statement?

Smart Manufacturing budgeted costs for 50000 linear feet of block are: Fixed manufacturing costs \ 24,000 per month Variable manufacturing costs \ 16.00 per linear foot Smart installed 40000 linear feet of block during March.How much is budgeted total manufacturing costs in March?

If actual results are different from planned results the difference must always be investigated by management to achieve effective budgetary control.

Budget reports should be prepared

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

is governed by generally accepted accounting principles.

Controls investment funds

What budgeted amounts appear on the flexible budget?

A flexible budget can be prepared for which of the following budgets comprising the master budget?

The comparison of differences between actual and planned results

A static budget is appropriate in evaluating a manager's performance if

Cost centers profit centers and investment centers can all be classified as responsibility centers.

The dollar amount of the controllable margin

Policies regarding when a difference between actual and planned results should be investigated are generally more restrictive for noncontrollable items than for controllable items.

Certain budget reports are prepared monthly whereas others are prepared more frequently depending on the activities being monitored.

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

The formula for computing return on investment is controllable margin divided by average operating assets.

The linens department of a large department store is

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

Budget reports comparing actual results with planned objectives should be prepared only once a year.

Which of the following is not a true statement?

Smart Manufacturing budgeted costs for 50000 linear feet of block are: Fixed manufacturing costs \ 24,000 per month Variable manufacturing costs \ 16.00 per linear foot Smart installed 40000 linear feet of block during March.How much is budgeted total manufacturing costs in March?

If actual results are different from planned results the difference must always be investigated by management to achieve effective budgetary control.

Budget reports should be prepared

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