UGA - ACCT2102 - Amanda Farmer - Test 3 - Quiz
T/F: If a company's operations are decentralized, only the top-level management group is allowed to make decisions.
False
T/F: 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 Account Receivable.
False
T/F: Management by exception dictates that only unfavorable variances be investigated.
False
T/F: The production manager is held responsible for all direct material and direct labor variances.
False
T/F: The total direct material variance can always be calculated by adding the DM price variance and the DM quantity variance.
False
T/F: To calculate the cash dividends paid to shareholders during the period, only information from the comparative Balance Sheet is needed.
False
T/F: A positive Residual Income indicates that the segment's Return on Investment is greater than the company's target rate of return.
True
T/F: A responsibility center is a segment for which the manager is held responsible for certain activities.
True
T/F: A standard cost is a budget for a single unit of product.
True
T/F: Companies are typically decentralized along product lines, by geographic regions, or through responsibility centers.
True
T/F: The Selling, General, and Administrative expenses reported on the Income Statement could include some noncash expenses.
True
T/F: The operating section of the Statement of Cash Flows can be prepared using either the direct or the indirect method.
True
Which of the following variances can first be calculated at the point of purchase? a. DM Price b. DM Quantity c. DL Rate d. DL Efficiency
a. DM Price
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. The difference between the actual cost per unit of input and the standard cost per unit of input.
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. revenues, expenses, and net income
a. operating, investing, and financing
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. $10 per unit / $5 per pound
Which of the following correctly calculates segment margin? a. SR - VC b. SR - VC - Traceable FC c. SR - COGS d. SR - VC - Allocated Common FC e. GP - Operating Expenses
b. SR - VC - Traceable FC
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. Sales Margin
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. The difference between the company's actual operating results and the budgeted created for its actual level of activity.
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. Cash received from the sale of equipment
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. Management is only held responsible for generating revenue and controlling costs.
For which of the following cost categories do manufacturers prepare standards? a. DM b. DL c. MOH d. All of the above
d. All of the above
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. Beg. and End. Merchandise Inventory b. COGS c. Beg. and End. Accounts Payable d. SR
d. SR
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. The potential for the duplication of costs and efforts is eliminated.
Which of the following formulas cannot be used to calculate the Total DL 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. standard DL rate per hour (actual DL hours logged - DL hours allowed for actual activity level)
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. By how much did Assets exceed Liabilities at the end of the period?
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.
i. Actual revenue was higher than expected. iv. Actual expenses were lower than expected.