Question 1

Cost containment practices by a firm would not be effective for cost increases caused by

Accepted Answer

A) inflation. 
B) a reduction in the quantity of an input purchased. 
C) normal seasonality. 
D) a reduction in the number of suppliers. 
A) inflation. 
B) a reduction in the quantity of an input purchased. 
C) normal seasonality. 
D) a reduction in the number of suppliers.

Question 2

The portion of variance in a dependent variable explained by an independent variable is referred to as the _________________________________________.

Accepted Answer

coefficien

Question 3

Maintaining excessive cash may reduce firm profitability because of low returns on cash investments.

Accepted Answer

A) True 
 B)False

Question 4

The difference between actual sales and budgeted sales is

Accepted Answer

A) a flexible budget variance. 
B) an efficiency measure. 
C) required in program budgeting. 
D) an effectiveness measure. 
A) a flexible budget variance. 
B) an efficiency measure. 
C) required in program budgeting. 
D) an effectiveness measure.

Question 5

Which kind of costs could be eliminated by closing a sales office?
$\begin{array}{ll}
\text { Direct } &\text {Discretionary } & \text {Commutted}   \
\end{array}$

Accepted Answer

A) yes yes no 
B) yes no yes 
C) yes no no 
D) no no yes 
A) yes yes no 
B) yes no yes 
C) yes no no 
D) no no yes

Question 6

What are the usual sources for cash in an organization?

Accepted Answer

1.Sale of equity or debt securities or o

Question 7

If a cost can be reduced to zero in the short run without significantly harming the organization,the cost is a

Accepted Answer

A) variable cost. 
B) committed cost. 
C) discretionary cost. 
D) product cost. 
A) variable cost. 
B) committed cost. 
C) discretionary cost. 
D) product cost.

Question 8

The term "discretionary costs" refers to

Accepted Answer

A) costs that management decides to incur in the current period to enable the company to achieve objectives other than the filling of orders placed by customers. 
B) costs that are likely to respond to the amount of attention devoted to them by a specified manager. 
C) costs that are governed mainly by past decisions that established the present levels of operating and organizational capacity and that only change slowly in response to small changes in capacity. 
D) amortization of costs that were capitalized in previous periods. 
A) costs that management decides to incur in the current period to enable the company to achieve objectives other than the filling of orders placed by customers. 
B) costs that are likely to respond to the amount of attention devoted to them by a specified manager. 
C) costs that are governed mainly by past decisions that established the present levels of operating and organizational capacity and that only change slowly in response to small changes in capacity. 
D) amortization of costs that were capitalized in previous periods.

Question 9

Cost control should be viewed as a short-term process.

Accepted Answer

A) True 
 B)False

Question 10

The level of discretionary costs

Accepted Answer

A) are set by management for one period at a time. 
B) cannot be changed in the short run. 
C) are determined when capital investment is undertaken. 
D) always varies with sales. 
A) are set by management for one period at a time. 
B) cannot be changed in the short run. 
C) are determined when capital investment is undertaken. 
D) always varies with sales.

Question 11

Careful analysis of the capital budget is an important control activity for

Accepted Answer

A) variable costs. 
B) discretionary costs. 
C) committed costs. 
D) period costs. 
A) variable costs. 
B) discretionary costs. 
C) committed costs. 
D) period costs.

Question 12

Epplin Company
The following information is provided for Epplin Company for the month of September:
$\begin{array}{ll}
\underline{\text { Actual }} &\underline{ \text { Standard }} \
\text { 1,800 }\text { units } &5 \text { DLHs per unit @ } \$ 10.00 \text { per DLH } \
8,900 \text { DLHs @ } \$ 10.50 \text { per DLH } & \text { VOH rate per DLH } \$ .75  \
\text { Variable OH } \$ 6,400 & \text { FOH rate per DLH } \$ 1.90 \
\text { Fixed OH } \$ 17,500 &\text { Budgeted FOH \$16,910 }
\end{array}$

Refer to Epplin Company.What is the price variance?

Accepted Answer

A) $4,450 F 
B) $4,450 U 
C) $1,000 F 
D) $1,000 U 
A) $4,450 F 
B) $4,450 U 
C) $1,000 F 
D) $1,000 U

Question 13

An effective control system functions before,during,and after an event.However,little control is possible during the event for most

Accepted Answer

A) variable manufacturing costs. 
B) variable period costs. 
C) discretionary fixed costs. 
D) committed fixed costs. 
A) variable manufacturing costs. 
B) variable period costs. 
C) discretionary fixed costs. 
D) committed fixed costs.

Question 14

A reasonable measure of efficiency relies on

Accepted Answer

A) qualitative measures of inputs and outputs. 
B) a match of inputs in one period with outputs in subsequent periods. 
C) a causal relationship between inputs and outputs. 
D) a ratio of planned output to actual output. 
A) qualitative measures of inputs and outputs. 
B) a match of inputs in one period with outputs in subsequent periods. 
C) a causal relationship between inputs and outputs. 
D) a ratio of planned output to actual output.

Question 15

Spending levels in prior years are often the basis of

Accepted Answer

A) traditional budgets. 
B) zero-base budgets. 
C) variance targets. 
D) engineered cost analyses. 
A) traditional budgets. 
B) zero-base budgets. 
C) variance targets. 
D) engineered cost analyses.

Question 16

An organization's bond rating may cause the organization to hold larger levels of cash than are necessary for operations.

Accepted Answer

A) True 
 B)False

Question 17

When budgeting for discretionary costs,less is always better.

Accepted Answer

A) True 
 B)False

Question 18

When the organizational output is difficult to define,management may rely on ____ for cost control.

Accepted Answer

A) qualitative measures 
B) program budgeting 
C) surrogate measures of output 
D) all of the above 
A) qualitative measures 
B) program budgeting 
C) surrogate measures of output 
D) all of the above

Question 19

Which of the following is not a factor that directly affects the budget for a discretionary cost?

Accepted Answer

A) the importance of the activity to the achievement of the organization's goals 
B) last period's budget 
C) the expected level of operations 
D) managerial negotiations in the budgeting process 
A) the importance of the activity to the achievement of the organization's goals 
B) last period's budget 
C) the expected level of operations 
D) managerial negotiations in the budgeting process

Question 20

What are four generic strategies that may be used in cost management to deal with uncertainty?

Accepted Answer

1.Explicitly considering uncertainty whe

Cost containment practices by a firm would not be effective for cost increases caused by

The portion of variance in a dependent variable explained by an independent variable is referred to as the _________________________________________.

Maintaining excessive cash may reduce firm profitability because of low returns on cash investments.

The difference between actual sales and budgeted sales is

Which kind of costs could be eliminated by closing a sales office? Direct Discretionary Commutted

What are the usual sources for cash in an organization?

If a cost can be reduced to zero in the short run without significantly harming the organization,the cost is a

The term "discretionary costs" refers to

Cost control should be viewed as a short-term process.

The level of discretionary costs

Careful analysis of the capital budget is an important control activity for

An effective control system functions before,during,and after an event.However,little control is possible during the event for most

A reasonable measure of efficiency relies on

Spending levels in prior years are often the basis of

An organization's bond rating may cause the organization to hold larger levels of cash than are necessary for operations.

When budgeting for discretionary costs,less is always better.

When the organizational output is difficult to define,management may rely on ____ for cost control.

Which of the following is not a factor that directly affects the budget for a discretionary cost?

What are four generic strategies that may be used in cost management to deal with uncertainty?

Introduction to Cost Accounting

Cost Terminology and Cost Behaviors

Predetermined Overhead Rates, Flexible Budgets, and Absorptionvariable Costing

Activity-Based Management and Activity-Based Costing

Job Order Costing

Process Costing

Standard Costing and Variance Analysis

The Master Budget

Break-Even Point and Cost-Volume-Profit Analysis

Relevant Information for Decision Making

Allocation of Joint Costs and Accounting for By-Products

Introduction to Cost Management Systems

Responsibility Accounting,support Department Allocations,and Transfer Pricing

Performance Measurement, balanced Scorecards, and Performance Rewards

Capital Budgeting

Implementing Quality Concepts

Inventory and Production Management

Emerging Management Practices

Filters

Exam 16: Managing Costs and Uncertainty

Cost containment practices by a firm would not be effective for cost increases caused by

The portion of variance in a dependent variable explained by an independent variable is referred to as the _________________________________________.

Maintaining excessive cash may reduce firm profitability because of low returns on cash investments.

The difference between actual sales and budgeted sales is

Which kind of costs could be eliminated by closing a sales office? Direct Discretionary Commutted

What are the usual sources for cash in an organization?

If a cost can be reduced to zero in the short run without significantly harming the organization,the cost is a

The term "discretionary costs" refers to

Cost control should be viewed as a short-term process.

The level of discretionary costs

Careful analysis of the capital budget is an important control activity for

An effective control system functions before,during,and after an event.However,little control is possible during the event for most

A reasonable measure of efficiency relies on

Spending levels in prior years are often the basis of

An organization's bond rating may cause the organization to hold larger levels of cash than are necessary for operations.

When budgeting for discretionary costs,less is always better.

When the organizational output is difficult to define,management may rely on ____ for cost control.

Which of the following is not a factor that directly affects the budget for a discretionary cost?

What are four generic strategies that may be used in cost management to deal with uncertainty?

Introduction to Cost Accounting

Cost Terminology and Cost Behaviors

Predetermined Overhead Rates, Flexible Budgets, and Absorptionvariable Costing

Activity-Based Management and Activity-Based Costing

Job Order Costing

Process Costing

Standard Costing and Variance Analysis

The Master Budget

Break-Even Point and Cost-Volume-Profit Analysis

Relevant Information for Decision Making

Allocation of Joint Costs and Accounting for By-Products

Introduction to Cost Management Systems

Responsibility Accounting,support Department Allocations,and Transfer Pricing

Performance Measurement, balanced Scorecards, and Performance Rewards

Capital Budgeting

Implementing Quality Concepts

Inventory and Production Management

Emerging Management Practices

Filters