Ch. 10 - True/False
A cost is defined as controllable for a manager if he or she can influence it even if that manager cannot strictly control it.
True
Enterprise Resource Planning systems help managers develop and analyze budgets.
True
Kaizen budgeting explicitly incorporates continuous improvement anticipated during a budget period into the budget process.
True
One function of budgets is to allow feedback by comparing actual results with the budgets.
True
Sensitivity analysis allows managers to see how results will change if predicted data are not achieved or an underlying assumption changes.
True
Variances can alert managers early to problems or events they may otherwise not see immediately.
True
A cost center and a profit center are different terms for the same thing.
False
A strategic plan and an operating plan both lead to short-run budgeting.
False
In a profit center, managers are accountable for revenues only.
False
It is important to build in "slack" when developing a budget.
False
Multinational companies have found budgeting to be unnecessary due to the impact of currency fluctuations.
False
Preparation of the production budget is usually the first step in preparing the operating budget.
False
Statistical analysis should be the only input used to forecast sales.
False
The first step in preparing an operating budget is to prepare a budgeted income statement.
False
The master budget reflects the impact of only operating decisions.
False