ACCT

Cost of goods sold

In a budgeted income statement, _________ is subtracted from sales to arrive at gross margin.

only I

In a sell or process further decision, consider the following costs: A variable production cost incurred prior to split-off. A variable production cost incurred after split-off. An avoidable fixed production cost incurred after split-off. Which of the above costs is (are) not relevant in a decision regarding whether the product should be processed further?

both the activity variances and the spending variances.

A flexible budget performance report for variable manufacturing costs shows

activity

Activity-based costing accumulates costs for each---

cost object

Activity-based costing estimates the costs of the resources consumed by ________

product level

Advertising is an example of a __________activity.

received from suppliers and transported to raw materials inventory.

Most companies compute the materials price variance when raw materials are _______

cost pools

Ordering materials, setting up machines, assembling products, and inspecting products are examples of

sales

The budgeting process begins with the preparation of the ______ budget.

vertical integration

The involvement by a company in more than one of the activities in the entire value chain from development through production, distribution, sales, and after-sales service is called ________.

False

The labor rate variance measures the difference between the actual hourly rate and the standard hourly rate, multiplied by the standard hours allowed for the actual output.

opportunity cost

The potential benefit that is given up when one alternative is selected over another is called ________.

the direct labor-hours that should have been used to complete the actual output for the period

The standard hours allowed is ________

amount of direct materials that should be used for each unit of finished product including an allowance for normal inefficiencies, such as scrap and spoilage.

The standard quantity per unit defines the

Whether the dfferential benefits exceed the differential costs

What of the following forms the basis for a financial advantage when making a business decision?

volume trade-off decision

When a company does not have enough capacity to produce all of the products and sales volume demanded by their customers, this leads to ________.

false

When a company has a production constraint, the product with the lowest contribution margin per unit of the constrained resource should usually be given highest priority.

variable portion of the predetermined overhead rate.

When computing variable manufacturing overhead variances, the standard rate represents the ________.

true

When the materials price variance is recorded at the time of purchase, raw materials are recorded as inventory at standard cost.

Companies choose a span of one year to correspond to their fiscal years.

Which of the following explains why operating budgets generally span a period of one year?

Direct labor-hours.

Which of the following is an allocation base commonly used under the traditional methods for allocation of overhead costs?

Lower-level managers are encouraged to create budgetary slack since they are more knowledgeable of day-to-day operations.

Which of the following is not a benefit of self-imposed budgets?

customer margins

Which of the following is not a management report that is normally prepared with ABC data?

Considering only the relevant costs gives results a different answer than that obtained when all costs are considered

Which of the following statements about using different approaches to analyze alternatives is NOT true?

special order

Which of the following types of decisions involves deciding whether to accept or reject an order that is outside the scope of normal sales?

Activity variance

changes in acitivity

Spending variance

changes in selling price, product mix, input prices, input usage

true

joint cost are sunk costs

The standard quantity allowed is _______

the amount of an input that should have been used to complete the actual output for the period.