Question 1

An investment center's performance is most likely to be affected by which of the following?

Accepted Answer

A) an increase is sales volume. 
B) a decrease in expenses. 
C) an increase in interest rates. 
D) all of the above. 
A) an increase is sales volume. 
B) a decrease in expenses. 
C) an increase in interest rates. 
D) all of the above.

Question 2

When is the master budget prepared?

Accepted Answer

A) before the budget period begins. 
B) after the budget period begins,but before it ends. 
C) about half way through the budget period begins. 
D) at the end or after the budget period ends. 
A) before the budget period begins. 
B) after the budget period begins,but before it ends. 
C) about half way through the budget period begins. 
D) at the end or after the budget period ends.

Question 3

What cost centers have input-output relationships sufficiently well established so that a particular set of inputs will provide a predictable and measurable set of outputs?

Accepted Answer

A) engineered cost centers. 
B) direct cost centers. 
C) opportunity cost centers. 
D) discretionary cost centers. 
A) engineered cost centers. 
B) direct cost centers. 
C) opportunity cost centers. 
D) discretionary cost centers.

Question 4

What is the cultural impact on budgeting?

Accepted Answer

A) Lower-level managers in Germany,the United Kingdom,the United States,New Zealand,Canada,and Australia are less willing to accept the "fact" that top managers are more powerful than they. 
B) Lower-level managers in Germany,the United Kingdom,the United States,New Zealand,Canada,and Australia are more likely to not accept top-down budgets. 
C) Lower-level managers in Germany,the United Kingdom,the United States,New Zealand,Canada,and Australia are more likely to want to participate in budgeting, 
D) all of the above 
A) Lower-level managers in Germany,the United Kingdom,the United States,New Zealand,Canada,and Australia are less willing to accept the "fact" that top managers are more powerful than they. 
B) Lower-level managers in Germany,the United Kingdom,the United States,New Zealand,Canada,and Australia are more likely to not accept top-down budgets. 
C) Lower-level managers in Germany,the United Kingdom,the United States,New Zealand,Canada,and Australia are more likely to want to participate in budgeting, 
D) all of the above

Question 5

The budget formula for manufacturing costs is $13,500 + $6.00 per unit per unit produced.The budget formula for marketing and administrative costs is $10,000 + $8.00 per unit sold.If 10,000 units are expected to be produced,but only 8,000 units are expected to be sold,what are the total budgeted expenses for the period?

Accepted Answer

Manufactur

Question 6

If a company wishes to establish a factory overhead budget system in which estimated costs can be derived directly from estimates of activity levels,which type of budget should it prepare?

Accepted Answer

A) zero-based budget. 
B) flexible budget. 
C) discretionary budget. 
D) fixed budget. 
A) zero-based budget. 
B) flexible budget. 
C) discretionary budget. 
D) fixed budget.

Question 7

Variable manufacturing overhead costs such as power are considered to be which of the following?

Accepted Answer

A) a semivariable,or mixed,cost having both variable and fixed components. 
B) a variable cost with variable components,only. 
C) a fixed cost with fixed components,only. 
D) all of the above 
A) a semivariable,or mixed,cost having both variable and fixed components. 
B) a variable cost with variable components,only. 
C) a fixed cost with fixed components,only. 
D) all of the above

Question 8

Which of the following statements is true concerning budgeting?

Accepted Answer

A) Budgeting is a dynamic process that ties together goals,plans,decision making,and employee performance evaluation 
B) Budgeting is required by generally accepted accounting principles. 
C) Budgeting is a static process that ties together goals,plans,decision making,and employee performance evaluation 
D) none of the above. 
A) Budgeting is a dynamic process that ties together goals,plans,decision making,and employee performance evaluation 
B) Budgeting is required by generally accepted accounting principles. 
C) Budgeting is a static process that ties together goals,plans,decision making,and employee performance evaluation 
D) none of the above.

Question 9

Marketing costs include expenditures for salaries,advertising,and sales office costs would be classified as which of the following type of activity?

Accepted Answer

A) customer-level activities. 
B) facility-level activities. 
C) product-level activities. 
D) unit-level activities. 
A) customer-level activities. 
B) facility-level activities. 
C) product-level activities. 
D) unit-level activities.

Question 10

In profit planning and budgeting,which statement is true concerning a favorable variance?

Accepted Answer

A) A favorable variance would increase operating profit,holding all other things constant. 
B) A favorable variance is always positive (good),holding all other things constant. 
C) A favorable variance would decrease operating profit,holding all other things constant. 
D) A favorable variance is always negative (bad),holding all other things constant. 
A) A favorable variance would increase operating profit,holding all other things constant. 
B) A favorable variance is always positive (good),holding all other things constant. 
C) A favorable variance would decrease operating profit,holding all other things constant. 
D) A favorable variance is always negative (bad),holding all other things constant.

Question 11

Which of the following is not a component of a comprehensive master budget?

Accepted Answer

A) budgeted income statement, 
B) budgeted balance sheet. 
C) budgeted retained earnings statement. 
D) budgeted statement of cash flows. 
A) budgeted income statement, 
B) budgeted balance sheet. 
C) budgeted retained earnings statement. 
D) budgeted statement of cash flows.

Question 12

An incentive plan model for accurate reporting should not have which of the following components?

Accepted Answer

A) it relates rewards positively to forecasted sales. 
B) it provides incentives for the sales manager to increase sales beyond the forecast. 
C) it penalizes the sales manager when sales are less than forecasted. 
D) it penalizes the sales manager when sales are more than forecasted. 
A) it relates rewards positively to forecasted sales. 
B) it provides incentives for the sales manager to increase sales beyond the forecast. 
C) it penalizes the sales manager when sales are less than forecasted. 
D) it penalizes the sales manager when sales are more than forecasted.

Question 13

Sales volume variance analysis.Crank Company prepared a budget last period with budgeted sales of 56,000 units at a price of $70 each.Variable costs were budgeted to be $10 per unit.Fixed costs were budgeted to be $2,100,000 for the period.During the period,actual sales totaled 60,000 units.
Required:
Prepare a variance report to show the difference between the master budget and the flexible budget.
(Crank Company;sales volume variance analysis. )

Accepted Answer

@#IMG-DLM&_TB2144_00 (a)$4,200,000 = 60,

Question 14

Which of the following statements is true concerning the flexible budget?

Accepted Answer

A) The flexible budget shows the expected relation between costs and volume. 
B) The flexible budget has a fixed cost component which is expected to be incurred regardless of the level of activity. 
C) The flexible budget has a variable cost per unit of activity component where variable costs change in total as the level of activity changes. 
D) all of the above. 
A) The flexible budget shows the expected relation between costs and volume. 
B) The flexible budget has a fixed cost component which is expected to be incurred regardless of the level of activity. 
C) The flexible budget has a variable cost per unit of activity component where variable costs change in total as the level of activity changes. 
D) all of the above.

Question 15

Explain the difference between a flexible budget and master budget.

Accepted Answer

The master budget is based on estimated

Question 16

Alma Mater College
The Admissions Department of Alma Mater College plans to hold several "open house" parties during the year.All the refreshment costs will be charged to the department.However,the party creates extra work for the Maintenance Department.The maintenance crew must work overtime and the maintenance supervisor is complaining about cost overruns in the Maintenance Department.
Refer to the Alma Mater College.Who should be responsible for the overtime costs of the maintenance workers?

Accepted Answer

The department that is respons

Question 17

What forms the basis for analyzing the differences between planned and actual results?

Accepted Answer

A) comparing actual results achieved with the master budget,only. 
B) comparing actual results with the flexible and master budgets. 
C) comparing actual results with the normal or average budget for the industry. 
D) comparing actual results achieved with the actual results of the prior years. 
A) comparing actual results achieved with the master budget,only. 
B) comparing actual results with the flexible and master budgets. 
C) comparing actual results with the normal or average budget for the industry. 
D) comparing actual results achieved with the actual results of the prior years.

Question 18

For which types of operations do firms design operational planning and control systems?

Accepted Answer

A) manufacturing operations only. 
B) marketing and manufacturing operations only. 
C) manufacturing and other activities but not marketing. 
D) manufacturing,marketing,and other activities. 
A) manufacturing operations only. 
B) marketing and manufacturing operations only. 
C) manufacturing and other activities but not marketing. 
D) manufacturing,marketing,and other activities.

Question 19

Manufacturing Overhead costs such as maintenance,rent,insurance,and depreciation should be categorized as which of the following?

Accepted Answer

A) fixed overhead costs and facility-level activities. 
B) variable overhead costs and facility-level activities. 
C) fixed overhead costs and product-level activities. 
D) variable overhead costs and product-level activities. 
A) fixed overhead costs and facility-level activities. 
B) variable overhead costs and facility-level activities. 
C) fixed overhead costs and product-level activities. 
D) variable overhead costs and product-level activities.

Question 20

Walk-In Health Center
The Walk-In Health Center sets targets for every responsibility center to achieve a 10 percent increase over last year in the number of patients treated.
Refer to the Walk-In Health Center.What is the problem with this performance measure?

Accepted Answer

Employees of the health center

An investment center's performance is most likely to be affected by which of the following?

When is the master budget prepared?

What cost centers have input-output relationships sufficiently well established so that a particular set of inputs will provide a predictable and measurable set of outputs?

What is the cultural impact on budgeting?

If a company wishes to establish a factory overhead budget system in which estimated costs can be derived directly from estimates of activity levels,which type of budget should it prepare?

Variable manufacturing overhead costs such as power are considered to be which of the following?

Which of the following statements is true concerning budgeting?

Marketing costs include expenditures for salaries,advertising,and sales office costs would be classified as which of the following type of activity?

In profit planning and budgeting,which statement is true concerning a favorable variance?

Which of the following is not a component of a comprehensive master budget?

An incentive plan model for accurate reporting should not have which of the following components?

Which of the following statements is true concerning the flexible budget?

Explain the difference between a flexible budget and master budget.

What forms the basis for analyzing the differences between planned and actual results?

For which types of operations do firms design operational planning and control systems?

Manufacturing Overhead costs such as maintenance,rent,insurance,and depreciation should be categorized as which of the following?

Walk-In Health Center The Walk-In Health Center sets targets for every responsibility center to achieve a 10 percent increase over last year in the number of patients treated. Refer to the Walk-In Health Center.What is the problem with this performance measure?

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

An investment center's performance is most likely to be affected by which of the following?

When is the master budget prepared?

What cost centers have input-output relationships sufficiently well established so that a particular set of inputs will provide a predictable and measurable set of outputs?

What is the cultural impact on budgeting?

If a company wishes to establish a factory overhead budget system in which estimated costs can be derived directly from estimates of activity levels,which type of budget should it prepare?

Variable manufacturing overhead costs such as power are considered to be which of the following?

Which of the following statements is true concerning budgeting?

Marketing costs include expenditures for salaries,advertising,and sales office costs would be classified as which of the following type of activity?

In profit planning and budgeting,which statement is true concerning a favorable variance?

Which of the following is not a component of a comprehensive master budget?

An incentive plan model for accurate reporting should not have which of the following components?

Which of the following statements is true concerning the flexible budget?

Explain the difference between a flexible budget and master budget.

What forms the basis for analyzing the differences between planned and actual results?

For which types of operations do firms design operational planning and control systems?

Manufacturing Overhead costs such as maintenance,rent,insurance,and depreciation should be categorized as which of the following?

Walk-In Health Center The Walk-In Health Center sets targets for every responsibility center to achieve a 10 percent increase over last year in the number of patients treated. Refer to the Walk-In Health Center.What is the problem with this performance measure?

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