Question 1

Which statements is correct concerning a flexible budget?

Accepted Answer

A) A flexible budget is not appropriate when costs and expenses are affected by fluctuations in volume limits. 
B) A flexible budget is appropriate for any relevant level of activity. 
C) A flexible budget is appropriate for control of factory overhead but not for control of direct materials and direct labor. 
D) A flexible budget is appropriate for control of direct materials and direct labor but not for control of factory overhead. 
A) A flexible budget is not appropriate when costs and expenses are affected by fluctuations in volume limits. 
B) A flexible budget is appropriate for any relevant level of activity. 
C) A flexible budget is appropriate for control of factory overhead but not for control of direct materials and direct labor. 
D) A flexible budget is appropriate for control of direct materials and direct labor but not for control of factory overhead. B

Question 2

How can budgets motivate people to perform because?

Accepted Answer

A) Budgets are mandated by the Department of Labor and included in labor union contracts. 
B) Budgets are authorized by generally accepted accounting principles. 
C) Budgets are required by the Securities and Exchange Commission. 
D) Budgets are standards or targets for people to achieve. 
A) Budgets are mandated by the Department of Labor and included in labor union contracts. 
B) Budgets are authorized by generally accepted accounting principles. 
C) Budgets are required by the Securities and Exchange Commission. 
D) Budgets are standards or targets for people to achieve. D

Question 3

What is the continuous process of measuring products,services,or activities against competitors' performance?

Accepted Answer

A) benchmarking. 
B) competitive analysis. 
C) performance evaluation 
D) none of the above. 
A) benchmarking. 
B) competitive analysis. 
C) performance evaluation 
D) none of the above. A

Question 4

What is a short-term operating budget?

Accepted Answer

A) management's quantitative action plan for the coming year. 
B) shareholders' quantitative action plan for the coming year. 
C) investment bankers' quantitative action plan for the coming year.s' quantitative action plan for the coming year. 
D) employees' quantitative action plan for the coming year. 
A) management's quantitative action plan for the coming year. 
B) shareholders' quantitative action plan for the coming year. 
C) investment bankers' quantitative action plan for the coming year.s' quantitative action plan for the coming year. 
D) employees' quantitative action plan for the coming year.

Question 5

Which of the following statements is true regarding the master budget?

Accepted Answer

A) The master budget is a blueprint of the planned operations of a firm for a period. 
B) The master budget begins with the production budget. 
C) The master budget does not require a sales forecast. 
D) all of the above. 
A) The master budget is a blueprint of the planned operations of a firm for a period. 
B) The master budget begins with the production budget. 
C) The master budget does not require a sales forecast. 
D) all of the above.

Question 6

Which of the following describes the difference in operating profits from the flexible budget to the master budget results from the difference between budgeted sales volume and actual sales volume?

Accepted Answer

A) the margin of safety. 
B) a profit-volume variance. 
C) a sales volume variance. 
D) a differential volume variance. 
A) the margin of safety. 
B) a profit-volume variance. 
C) a sales volume variance. 
D) a differential volume variance.

Question 7

Which statement is true concerning variable manufacturing overhead costs?

Accepted Answer

A) Variable manufacturing costs vary with units produced. 
B) Variable manufacturing costs such as indirect labor and supplies are considered to be batch-level activities. 
C) Variable manufacturing costs such as power are considered to be a true variable cost. 
D) all of the above 
A) Variable manufacturing costs vary with units produced. 
B) Variable manufacturing costs such as indirect labor and supplies are considered to be batch-level activities. 
C) Variable manufacturing costs such as power are considered to be a true variable cost. 
D) all of the above

Question 8

Why are incentive compensation plans often criticized?

Accepted Answer

A) managers may take actions to improve short-run performance only. 
B) managers may take actions to improve long-run performance only. 
C) stock options affect market prices. 
D) they are ineffective in motivating managers. 
A) managers may take actions to improve short-run performance only. 
B) managers may take actions to improve long-run performance only. 
C) stock options affect market prices. 
D) they are ineffective in motivating managers.

Question 9

Which statement is true concerning direct labor?

Accepted Answer

A) is work traceable directly to particular units of production. 
B) uses estimates which allow for normal,periodic rest periods,yet motivates employees to perform efficiently. 
C) could be fixed,if the firm is a high-tech company having only a few workers,or variable 
D) all of the above. 
A) is work traceable directly to particular units of production. 
B) uses estimates which allow for normal,periodic rest periods,yet motivates employees to perform efficiently. 
C) could be fixed,if the firm is a high-tech company having only a few workers,or variable 
D) all of the above.

Question 10

Julianna Company
Julianna Company budgets on an annual basis for its fiscal year.The following beginning and ending inventory levels (in units)are planned for the fiscal year of July 1,20X1 through June 30,20X2.
   
*Two (2)units of raw material are needed to produce each unit of finished product.
Refer to Julianna Company.If Julianna were to manufacture 500,000 finished units during the 20X1-20X2 fiscal year,what is the number of units of raw material Julianna needs to purchase?

Accepted Answer

Since each unit of finished goods requir

Question 11

Which statement is true concerning direct materials?

Accepted Answer

A) are materials traceable to individual units produced. 
B) costs are almost always variable. 
C) costs are almost always fixed. 
D) "a" and "b" 
A) are materials traceable to individual units produced. 
B) costs are almost always variable. 
C) costs are almost always fixed. 
D) "a" and "b"

Question 12

Jones Corporation estimates manufacturing costs as follows for the coming year:
 
If 25,000 units are produced,what is the total manufacturing costs?

Accepted Answer

A) $275,000 
B) $300,000 
C) $775,000 
D) $900,000 
A) $275,000 
B) $300,000 
C) $775,000 
D) $900,000

Question 13

Goal congruence occurs if members of an organization have incentives to perform in who's interest?

Accepted Answer

A) the firm's interest. 
B) their own economic interest. 
C) the national interest. 
D) all of the above 
A) the firm's interest. 
B) their own economic interest. 
C) the national interest. 
D) all of the above

Question 14

Estimating flexible selling expense budget and computing sales volume variance.Miami Products estimates that it will incur the following selling expenses next period:
   
Required:
a.Derive the cost equation for selling expenses.(Hint: y = a + bx + cy. )
b.Assume that Miami sells 50,000 units during the period.Budgeted sales totaled 65,000 units at a budgeted sales price of $5.50 per unit.Prepare a variance report to show the difference between the master budget and the flexible budget.
(Miami Products;estimating flexible selling expense budget and computing variances. )

Accepted Answer

a.
 @#IMG-DLM&_TB2144_00 b.Sales Volume Variance A

Question 15

If direct labor cost is fixed,then it is considered to be which type of cost in the cost hierarchy?

Accepted Answer

A) product-level cost. 
B) facility-level cost. 
C) unit-level cost. 
D) either "a" or "b" 
A) product-level cost. 
B) facility-level cost. 
C) unit-level cost. 
D) either "a" or "b"

Question 16

For an organizational unit to be considered a responsibility center,what must be true?

Accepted Answer

A) The unit must be separable and identifiable. 
B) The unit must lack financial measures of performance. 
C) The unit must lack control over an activity. 
D) all of the above. 
A) The unit must be separable and identifiable. 
B) The unit must lack financial measures of performance. 
C) The unit must lack control over an activity. 
D) all of the above.

Question 17

An incentive plan model for accurate reporting should have which of the following component(s)?

Accepted Answer

A) it relates rewards positively to forecasted sales. 
B) it provides incentives for the sales manager to decrease sales beyond the forecast. 
C) it penalizes the sales manager when sales are more than forecasted. 
D) none of the above 
A) it relates rewards positively to forecasted sales. 
B) it provides incentives for the sales manager to decrease sales beyond the forecast. 
C) it penalizes the sales manager when sales are more than forecasted. 
D) none of the above

Question 18

Which of the following statements is true concerning the fixed component of power cost?

Accepted Answer

A) This would be categorized as a unit level activity. 
B) This is a cost that would be incurred regardless of the level of output. 
C) This would be categorized as a facility-related cost. 
D) both "b" and "c" 
A) This would be categorized as a unit level activity. 
B) This is a cost that would be incurred regardless of the level of output. 
C) This would be categorized as a facility-related cost. 
D) both "b" and "c"

Question 19

How is a budget a tool for planning and performance evaluation?

Accepted Answer

A budget is an estimate of financial sta

Question 20

A marketing company expects to incur fixed expenses of $50,000 per month and variable costs of $4.00 per sales call and $2.00 per telephone call.During the month the sales force made 100 sales calls and 500 telephone calls.Actual costs incurred included $52,000 for fixed costs and $1,200 for variable costs.Compute the flexible budget variance.

Accepted Answer

@#IMG-DLM&_TB2144_00 Differenc

Which statements is correct concerning a flexible budget?

How can budgets motivate people to perform because?

What is the continuous process of measuring products,services,or activities against competitors' performance?

What is a short-term operating budget?

Which of the following statements is true regarding the master budget?

Which of the following describes the difference in operating profits from the flexible budget to the master budget results from the difference between budgeted sales volume and actual sales volume?

Which statement is true concerning variable manufacturing overhead costs?

Why are incentive compensation plans often criticized?

Which statement is true concerning direct labor?

Which statement is true concerning direct materials?

Jones Corporation estimates manufacturing costs as follows for the coming year: If 25,000 units are produced,what is the total manufacturing costs?

Goal congruence occurs if members of an organization have incentives to perform in who's interest?

If direct labor cost is fixed,then it is considered to be which type of cost in the cost hierarchy?

For an organizational unit to be considered a responsibility center,what must be true?

An incentive plan model for accurate reporting should have which of the following component(s)?

Which of the following statements is true concerning the fixed component of power cost?

How is a budget a tool for planning and performance evaluation?

Fundamental Concepts

Measuring Product Costs

Activity-Based Management

Strategic Management of Costs,quality,and Time

Cost Drivers and Cost Behavior

Financial Modeling for Short-Term Decision Making

Differential Cost Analysis for Operating Decisions

Capital Expenditure Decisions

Profit and Cost Center Performance Evaluation

Investment Center Performance Evaluation

Incentive Issues

Allocating Costs to Responsibility Centers

Filters

Exam 9: Profit Planning and Budgeting

Which statements is correct concerning a flexible budget?

How can budgets motivate people to perform because?

What is the continuous process of measuring products,services,or activities against competitors' performance?

What is a short-term operating budget?

Which of the following statements is true regarding the master budget?

Which of the following describes the difference in operating profits from the flexible budget to the master budget results from the difference between budgeted sales volume and actual sales volume?

Which statement is true concerning variable manufacturing overhead costs?

Why are incentive compensation plans often criticized?

Which statement is true concerning direct labor?

Which statement is true concerning direct materials?

Jones Corporation estimates manufacturing costs as follows for the coming year: If 25,000 units are produced,what is the total manufacturing costs?

Goal congruence occurs if members of an organization have incentives to perform in who's interest?

If direct labor cost is fixed,then it is considered to be which type of cost in the cost hierarchy?

For an organizational unit to be considered a responsibility center,what must be true?

An incentive plan model for accurate reporting should have which of the following component(s)?

Which of the following statements is true concerning the fixed component of power cost?

How is a budget a tool for planning and performance evaluation?

Fundamental Concepts

Measuring Product Costs

Activity-Based Management

Strategic Management of Costs,quality,and Time

Cost Drivers and Cost Behavior

Financial Modeling for Short-Term Decision Making

Differential Cost Analysis for Operating Decisions

Capital Expenditure Decisions

Profit and Cost Center Performance Evaluation

Investment Center Performance Evaluation

Incentive Issues

Allocating Costs to Responsibility Centers

Filters