Accounting Test 3 Review
most manufacturing plants are considered cost centers because they have control over
costs only
The budgeting process does NOT involve which of the following activities?
increase in sales by increasing marketing efforts
Which of the following is NOT a reason for a direct materials quantity variance?
increased material cost per unit
Mason Corporation had 1,101,000 in invested assets, sales of 1,238,000, income from operations amounting to 212,000, and a desired minimum rate of return of 15%. The investment turnover for Mason Corportation is
investment turnover= sales/ invested assets= 1,238,000/1,101,000= 1.12
The primary difference between static budget and a flexible budget is that a static budget
is a plan for a single level of production, whereas a flexible budget can be converted to any level of production
For higher levels of management, responsibility accounting reports
are more summarized than for lower levels of management.
A formal written statement of management's plans for the future, expressed in financial terms is a
budget
Which of the following is a measure of a cost center manager's performance?
budget performance report
Periodic comparisons between planned objectives and actual performance are reported in:
budget performance reports
Businesses that are separated into two or more manageable units in which managers have authority and responsibility for operations are said to be
decentralized
which is the best example of a decentralized operation
each unit is responsible for their own operations and decision making
which of the following budgets allow for adjustments in activity levels?
flexible budget
The first budget customarily prepared as part of an entity's master budget is the
sales budget
A favorable cost variance occurs when
standard costs are more than actual costs
the total manufacturing cost variance is
the difference between the actual costs and standard costs for units produced
Standard costs are used in companies for a variety of reasons. Which of the following is NOT one of the benefits for using standard costs?
used to indicate where changes in technology and machinery need to be made