Accounting II - Exam 3
- is a lost potential benefit that could have Benn obtained by following an alternative course of action.
An opportunity cost
An overly optimistic sales budget may result in --.
Excessive inventories
When the units required to fill a special order can be produced within existing plant capacity, which of the following will NOT increase?
Fixed costs
What would be the same total amount on a flexible budget and a static budget if the activity level is different for the two types of budgets.
Fixed manufacturing overhead
An unrealistic budget is more likely to result when it -.
Has been developed in a top down fashion.
A manager of a cost center is evaluated mainly on --.
His or her ability to control costs
Which types of responsibility centers generate both revenues and costs?
Investments and profit centers
The financing section of a cash budget is needed if there is a cash deficiency or of the ending cash balance is less than --.
Managements minimum required balance
Under management by exception, what differences between planned and actual results should be investigated.
Material and controllable
What is always a relevant cost?
Opportunity cost
Long-range planning usually encompasses a period of --.
at least five years
In preparing a direct labor budget, the number of direct labor hours required is calculated using the --.
production budget
Costs that will differ between alternative courses of action and influence the outcome of a decision are called --.
relevant costs
A responsibility report should --.
show only those costs that a manager can control
In an equipment replacement decision, the cost of the old equipment is a --.
sunk cost