ACCT 2102 | Ch. 10, 11, 13 - Conceptual

Which of the following is always a "safe" way to calculate the total DM variance? A. DM price variance + DM qty variance B. (qty purchased)(act price) - (qty purchased)(std price) C. (std input ratio)(std price) D. (qty used)(act price) - (qty allowed)(std price)

D

True/False: A segment's performance should be judged based on its segment margin.

True

True/False: A standard cost is a budget for a single unit of product.

True

True/False: The Selling, General, and Administrative expenses reported on the Income Statement could include some noncash expenses.

True

True/False: The master budget variance can be divided into the flex budget variance and the vol variance

True

True/False: The master budget variance can be divided into the flex budget variance and the volume variance.

True

True/False: The operating section of the Statement of Cash Flows can be prepared using either the direct or the indirect method.

True

SM = CM - ?

traceable FC

If there was a net increase in accounts payable during the period, A. inventory purchases were greater than payments to suppliers B. cost of goods sold was greater than inventory purchases C. cost of goods sold was less than inventory purchases D. inventory purchases were less than payments to suppliers

A

What question is answered by the Statement of Cash Flow? A. Did the company's operating activities generate sufficient cash inflow to cover operating outflows? B. Were the long-term assets purchased or sold? C. Were cash dividends paid? D. Were dividends declared? E. Why does net income not equal cash?

A

Which of the following correctly lists the three categories of activities reported on the Statement of Cash Flows? a. operating, investing, and financing b. assets, liabilities, and equity c. revenue, expenses, and net income

A

Which of the following statements best defines the direct material price variance? a. The difference between the actual cost per unit of input and the standard cost per unit of input. b. The difference between the actual quantity of input used during the period to the standard quantity of input allowed during the period.

A

Which of the following statements describes a favorable variance? i. Actual revenue was higher than expected. ii. Actual expenses were higher than expected. iii. Actual revenue was lower than expected. iv. Actual expenses were lower than expected. a. i. and iv. b. ii. and iii. c. i. only d. iii. and iv. e. i. and ii. A

A

Which of the following variances can first be calculated at the point of purchase? a. Direct Material Price b. Direct Material Quantity c. Direct Labor Rate d. Direct Labor Efficiency

A

A favorable DM price variance could indicate A. lower skilled laborers were hired B. substandard material was purchased C. laborers were more efficient than expected D. production equipment malfunctioned

B

A net positive cash flow from financing activities could be caused by: A. operating cash inflows exceeding operating cash outflows B. the issuance of additional stock C. selling long-term assets D. paying dividends

B

A positive residual income indicates: A. that a segment's ROI is less than the hurdle rate B. that a segment's ROI is greater than the hurdle rate

B

An investment turnover of 2 indicates: A. for every $1 of SR, $2 of capital is invested B. for every $1 of cap invested, $2 of SR is generated C. for every $1 of capital invested, $2 of income is earned D. for every $1 of SR, $2 of income is earned

B

If the standard direct material cost per unit is $10 and the standard direct material cost is $5 per pound, which of the following formulas correctly calculates the direct material input ratio? a. $10 per unit x $5 per pound b. $10 per unit ÷ $5 per pound c. $10 per unit + $5 per pound d. $10 per unit - $5 per pound

B

Which of the following correctly calculates segment margin? a. Sales Revenue - Variable Costs b. Sales Revenue - Variable Costs - Traceable Fixed Costs c. Sales Revenue - Cost of Goods Sold d. Sales Revenue - Variable Costs - Allocated Common Fixed Costs e. Gross Profit - Operating Expenses

B

Which of the following statements accurately describes a flexible budget variance? a. The difference between a company's actual operating results and its master budget. b. The difference between the company's actual operating results and the budgeted created for its actual level of activity. c. The difference between the company's flexible budget and its master budget.

B

Which of the following tells management how much income is earned from every sales dollar generated? a. Return on Investment b. Sales Margin c. Investment/Capital Turnover d. Residual Income e. Segment Margin

B

Which of the following describes a profit center? a. Management is only held responsible for controlling costs. b. Management is held responsible for efficiently managing the segment's assets. c. Management is only held responsible for generating revenue and controlling costs. d. Return on Investment would be used to evaluate the segment's performance.

C

Which of the following equations would NOT result in a standard input ratio? A. std unit DL cost ÷ std rate B. qty allowed ÷ actual output C. actual DL cost ÷ hrs logged D. hrs allowed ÷ actual output

C

Which of the following transactions would be a source of cash reported in the investing activities section of the Statement of Cash Flows? a. Cash received from sales to customers b. Cash dividends paid to the shareholders c. Cash received from the sale of equipment d. Cash received from the assumption of long-term debt e. Cash paid to repurchase treasury stock

C

Assuming all merchandise purchases are made on account, which of the following pieces of information would you NOT need to know in order to calculate the cash payments to suppliers during the period? a. Beginning and Ending Merchandise Inventory b. Cost of Goods Sold c. Beginning and Ending Accounts Payable d. Sales Revenue

D

For which of the following cost categories do manufacturers prepare standards? a. Direct Material b. Direct Labor c. Manufacturing Overhead d. All of the above

D

What does it mean for a manager to make a decision that's in the company's best interest? A. The manager accepts the investment opportunity. B. The manager rejects the investment opportunity. C. The division's ROI is > the company's hurdle rate. D. The manager and the company make the same decision.

D

What question is answered by the Statement of Retained Earnings? A. Did the company's operating activities generate sufficient cash inflow to cover operating outflows? B. Were the long-term assets purchased or sold? C. Were cash dividends paid? D. Were dividends declared? E. Why does net income not equal cash?

D

Which of the following formulas cannot be used to calculate the total direct labor variance? a. DL rate + DL efficiency b. (actual DL hours logged)(actual rate per hour) - (standard DL hours allowed)(standard rate per hour) c. actual DL cost - expected DL cost for actual activity level d. standard DL rate per hour (actual DL hours logged - DL hours allowed for actual activity level)

D

Which of the following is not an advantage of decentralization? a. Top management is able to focus on strategic planning and decision-making. b. Customer relations are improved because management is able to quickly respond to customer inquiries and demands. c. Segment managers receive training for top-level management positions. d. The potential for the duplication of costs and efforts is eliminated. e. Segment managers experience increased motivation and the company experiences increased retention as a result.

D

Which of the following is not an advantage of decentralized operations? A. Information used to make decisions is more accurate. B. Top managers are able to focus on strategic decision making. C. Relationships with customers are improved. D. Concerns about a lack of goal congruence are eliminated.

D

Which of the following statements is true? A. DL efficiency var is calculated at the pt of purchase B. Production mgr is responsible for all DM and DL variances C. The std input ratio is the actual amt used to produce 1 unit D. Quantity purchased is used in the DM price variance

D

Which of the following statement is not a question that can be answered by the Statement of Cash Flows? a. Did the company operate within its means during the period? b. Were long-term assets either purchased or sold during the period? c. Were cash dividends paid to shareholders during the period? d. Why does Net Income for the period not equal ending cash reported on the Balance Sheet? e. By how much did Assets exceed Liabilities at the end of the period?

E

If a company's operations are decentralized, only the top-level management group is allowed to make decisions.

False

The production manager is held responsible for all direct material and direct labor variances.

False

True/False: If all sales are made on account, the only piece of information you would need to calculate the cash received from customers during the period is the net change in Accounts Receivable.

False

True/False: Management by exception dictates that only unfavorable variances be investigated.

False

True/False: The quantity purchased in a period is not used in the direct material price variance.

False

True/False: The total direct material variance can always be calculated by adding the DM price variance and the DM quantity variance.

False

True/False: To calculate the cash dividends paid to shareholders during the period, only information from the comparative Balance Sheet is needed.

False

True/False: Variances are labeled material or immaterial based on whether they are favorable or unfavorable.

False

ROI = ? / Capital Investment

OPY

? - Noncash expenses = Cash operating expenses

SGA

Companies are typically decentralized along product lines, by geographic regions, or through responsibility centers.

True

True/False: A positive Residual Income indicates that the segment's Return on Investment is greater than the company's target rate of return.

True

True/False: A responsibility center is a segment for which the manager is held responsible for certain activities.

True

What is another name for a performance report?

budget versus actual report