accounting final

Which of the following would not be an objective used in the customer perspective of the balanced scorecard approach? a) Customer retention. b) Earnings per share. c) Percentage of customers who would recommend product to a friend. d) Brand recognition.

B) Earnings per share.

Which one of the following budgets would not be prepared for a merchandising company? a) Merchandise purchases budget. b) Production budget. c) Cash budget. d) Capital expenditures budget.

b) Production budget.

The cash budget contains sections for each of the following except a) financing. b) capital expenditures. c) cash disbursements. d) cash receipts.

b) capital expenditures.

Generally accepted accounting principles allow a company to: (a)report inventory at standard cost but cost of goods sold must be reported at actual cost. (b)report cost of goods sold at standard cost but inventory must be reported at actual cost. (c)report inventory and cost of goods sold at standard cost as long as there are no significant differences between actual and standard cost. (d)report inventory and cost of goods sold only at actual costs; standard costing is never permitted.

(c)report inventory and cost of goods sold at standard cost as long as there are no significant differences between actual and standard cost.

Under responsibility accounting, the evaluation of a manager's performance is based on matters that the manager a) directly and indirectly controls. b) directly controls. c) has shared responsibility for with another manager. d) indirectly controls.

b) directly controls.

The formula for the production budget is budgeted sales in units plus: a. Desired ending inventory less beginning ending inventory b. Beginning finished goods units less desired ending finished goods c. Desired ending direct materials units less beginning direct materials units d. Desired ending finished goods units less beginning finished goods units

d. Desired ending finished goods units less beginning finished goods units

The budget for a merchandiser differs from a budget for a manufacturer because (a) a merchandise purchases budget replaces the production budget. (b) the manufacturing budgets are not applicable. (c) none of the above. (d) both (a) and (b) above.

(d) both (a) and (b) above.

A manager of an investment center can improve ROI by: (a)increasing average operating assets. (b)reducing sales. (c)increasing variable costs. (d)reducing variable and/or controllable fixed costs.

(d)reducing variable and/or controllable fixed costs.

Which one of the following is a step that management must perform when developing the flexible budget? A) Identify the activity index and the relevant range of activity. b) Estimate the number of units to be produced. c) Determine the expected costs outside of the relevant range. d) All of the options are steps management must perform when developing the flexible budget.

A) Identify the activity index and the relevant range of activity.

All of the following statements are correct about controllable costs except a) Fewer costs are controllable as one moves up to each higher level of managerial responsibility. b) Costs incurred directly by a level of responsibility are controllable at that level. c) All costs are controllable at some level of responsibility within a company. d) All costs are controllable by top management.

a) Fewer costs are controllable as one moves up to each higher level of managerial responsibility.

When a company prepares financial statements using standard costing, which items are reported at standard cost? a) Inventories and cost of goods sold. b) Net income and cost of goods sold. c) Net income and inventories. d) Selling expenses and cost of goods sold.

a) Inventories and cost of goods sold.

Ace Company monitors its managers' performance using a static budget. Which one of the following situations will provide the fairest evaluation for those managers? a) When the company performs at the same activity level as the static budget level. b) When activity levels fluctuate from month to month. c) When the actual costs incurred equal the amounts on the budget. d) When the master budget activity is less than the actual activity.

a) When the company performs at the same activity level as the static budget level.

The accounting department of a manufacturing company is an example of: (a)a cost center. (b)a profit center. (c)an investment center. (d)a contribution center.

a) a cost center

Normal standards a) allow for rest periods, machine breakdowns, and setup time. b) are rarely used because managers believe they lower workforce morale. c) are more likely than ideal standards to result in unethical practices. d) represent level of performance under perfect operating conditions.

a) allow for rest periods, machine breakdowns, and setup time.

A variance is favorable if actual costs are a) less than standard costs. b) greater than budgeted costs. c) less than budgeted costs. d) greater than standard costs.

a) less than standard costs.

The formula for computing the direct labor budget is to multiply the direct labor cost per hour by the a) total required direct labor hours. b) physical units to be produced. c) equivalent units to be produced. d) no correct answer is given.

a) total required direct labor hours.

7. The budgeted income statement is a. The end product of the operating budgets b. The end product of the financial budgets c. The starting point of the master budget d. Dependent on cash receipts and cash disbursements

a. The end product of the operating budgets

5. The formula for computing the direct labor budget is to multiply the direct labor cost per hour by the a. Total required direct labor hours b. Physical units to be produced c. Equivalent units to be produced d. None of the above

a. Total required direct labor hours

Which is a true statement regarding using a higher discount rate to calculate the net present value of a project? a) It is appropriate to use a higher rate if the project will have a short useful life relative to other projects being considered. b) It will make it less likely that the project will be accepted. c) It is appropriate to use a higher rate if the project is perceived as being less risky than other projects being considered. d) It will make it more likely that the project will be accepted.

b) It will make it less likely that the project will be accepted

A static budget is: (a)a projection of budget data at several levels of activity within the relevant range of activity (b)a projection of budget data at a single level of activity. (c)compared to a flexible budget in a budget report. (d)never appropriate in evaluating a manager's effectiveness in controlling costs.

b) a projection on budget data at a single level of activity

Standard costs a) are imposed by governmental agencies. b) are predetermined units costs which companies use as measures of performance. c) can be used by manufacturing companies but not by service or not-for-profit companies. d) all of the above.

b) are predetermined units costs which companies use as measures of performance.

The formula used to calculate the internal rate of return is similar to the formula used to calculate the: a) annual rate of return. b) cash payback period. c) profitability index. d) net present value.

b) cash payback period.

The balanced scorecard perspective that is the most traditional view of a company is the a) internal process perspective. b) financial perspective. c) learning and growth perspective. d) customer perspective.

b) financial perspective.

A project should be accepted if its internal rate of return exceeds: a) the rate of return on a government bond. b) the company's required rate of return. c) zero. d) the rate the company pays on borrowed funds.

b) the company's required rate of return.

3) In recording the issuance of raw material to a job order cost system, it would be incorrect to: a. Dr Work in process b. Dr Finished Goods c. Dr Manufacturing Overhead d. Cr Raw Materials

b. Dr Finished Goods

What is the difference between a budget and a standard? a) A budget is the amount planned, while a standard reflects the actual results. b) A budget is the cost of an item at a static activity level, while a standard is based on a flexible activity level. c) A budget is a total amount, while a standard expresses only a unit amount. d) There is no difference. They are the same.

c) A budget is a total amount, while a standard expresses only a unit amount.

Which of the following lists includes only financial budgets? a) Capital expenditure budget, sales budget, and budgeted income statement. b) Budgeted income statement, budgeted balance sheet, and sales budget. c) Budgeted balance sheet, cash budget, and the capital expenditures budget. d) Cash budget, production budget, and capital expenditures budget

c) Budgeted balance sheet, cash budget, and the capital expenditures budget.

For which of the following costs is a static budget most appropriate? a) Uncontrollable costs. b) Actual costs. c) Fixed overhead costs. d) Variable overhead costs.

c) Fixed overhead costs.

Which of the following is not a cash outflow used as an input in capital budgeting decisions? a) Overhaul of equipment. b) Repairs and maintenance. c) Salvage value of equipment when project is complete. d) Initial investment.

c) Salvage value of equipment when project is complete

In the merchandise purchases budget, required merchandise purchases are computed by adding a) budgeted sales and desired ending merchandise inventory together. b) budgeted cost of goods sold and desired ending merchandise inventory together. c) budgeted cost of goods sold and desired ending merchandise inventory together and deducting beginning merchandise inventory. d) budgeted sales and desired ending merchandise inventory together and deducting beginning merchandise inventory.

c) budgeted cost of goods sold and desired ending merchandise inventory together and deducting beginning merchandise inventory.

A positive net present value means that the: a) project is unacceptable. b) project's rate of return is less than the cutoff rate. c) project's rate of return exceeds the required rate of return. d) project's rate of return equals the required rate of return.

c) project's rate of return exceeds the required rate of return.

A production manager in a manufacturing company would most likely receive a: (a)sales report. (b)income statement. (c)scrap report. (d)shipping department overhead report.

c) scrap report

In a flexible budget, a cost that would remain the same at each activity level is a) indirect labor. b) indirect materials. c) supervision. d) utilities.

c) supervision.

When applying the net present value method with unequal cash flows a) the present value computations are so complex that the method loses its relevance. b) present value computations can be disregarded. c) the present value of a single future amount must be applied to each annual cash flow. d) the same present value tables are used in the computations as when the cash flows are equal.

c) the present value of a single future amount must be applied to each annual cash flow.

6. Each of the following budgets is used in preparing the budgeting income statement except the: a. Sale budget b. Selling and administrative budget c. Capital expenditure budget d. Direct labor budget

c. Capital expenditure budget

9. To evaluate performance of a profit center manager, upper management needs detailed information about a. Controllable costs b. Controllable revenues c. Controllable costs and revenues d. Controllable costs and revenues and average operating assets

c. Controllable costs and revenues

1) Any activity that causes resources to be consumed is called a: a. Facility-level activity b. Just-in-time activity c. Cost driver d. Non-value added activity

c. Cost driver

2) Mynex Company completes Job 26 at a cost of $4,500 and later sells it for $7,000 cash. The correct entry to record when the product is completed is: a. Dr Finished Goods, $7000; cr WIP, $7000 b. Dr COGS $7000; Cr Finished Goods $7000 c. Dr Finished Goods $4500; Cr WIP $4500 d. Dr Acct receivable $7000; Cr Sales Revenue $7000

c. Dr Finished Goods $4500; Cr WIP $4500

2) A relevant facility level cost driver for heating costs is: a. Machine hours b. Direct materials c. Floor space d. Direct labor costs

c. Floor space

5. Budgetary controls involves all but one of the following: a. Modifying future plans b. Analyzing differences c. Using static budgets d. Determining differences between actual and planned results

c. Using static budgets

Which of the following is not an example of a capital budgeting decision? a) Decision to build a new plant. b) Decision to renovate an existing facility. c) Decision to buy a piece of machinery. d) All of these are capital budgeting decisions.

d) All of these are capital budgeting decisions.

Which of the following are correct statements about a budget? a) It is a formal written statement of management's plans for a specified future time period. b) It becomes an important basis for evaluating performance. c) It promotes efficiency and serves as a deterrent to waste and inefficiency. d) All of these options are correct statements.

d) All of these options are correct statements.

Each of the following formulas is correct except a) Materials quantity variance = (Actual quantity x Standard price) - (Standard quantity x Standard price). b) Labor quantity variance = (Actual hours x Standard rate) - (Standard hours x Standard rate). c) Labor price variance = (Actual hours x Actual rate) - (Actual hours x Standard rate). d) Materials price variance = (Actual quantity x Actual price) - (Standard quantity x Standard price).

d) Materials price variance = (Actual quantity x Actual price) - (Standard quantity x Standard price).

In most cases, not-for-profit entities a) know budgeted cash receipts at the beginning of a time period, so they budget only for expenditures. b) can ignore budgets because they are not expected to generate net income. c) prepare budgets using the same steps as those used by profit-oriented enterprises. d) begin the budgeting process by budgeting expenditures rather than receipts.

d) begin the budgeting process by budgeting expenditures rather than receipts.

Each of the following budgets is used in preparing the budgeted income statement except the a) selling and administrative budget. b) sales budget. c) direct labor budget. d) capital expenditure budget

d) capital expenditure budget

The rate of return that management expects to pay on all borrowed and equity funds is the: a) hurdle rate. b) required rate. c) cutoff rate. d) cost of capital.

d) cost of capital.

The preferred inputs for capital budgeting purposes are: a) actual cash flows. b) estimated accrual basis numbers. c) actual accrual basis numbers. d) estimated cash flows.

d) estimated cash flows.

The rate that will cause the present value of the proposed capital expenditure to equal the present value of the expected annual cash inflows is the: a) required rate of return. b) cost of capital. c) annual rate of return. d) internal rate of return.

d) internal rate of return.

The essentials of effective budgeting do not include a) management acceptance. b) research and analysis. c) sound organizational structure. d) top-down budgeting.

d) top-down budgeting

7. Responsibility centers include: a. Cost centers b. Profit centers c. Investment centers d. All of the above

d. All of the above

4. Which of the following is not an example of a capital budget decision? a. Decision to build a new plant b. Decision to renovate an existing facility c. Decision to buy a piece of machinery d. All of these are capital budgeting decisions

d. All of these are capital budgeting decisions

8. In using the variance reports to evaluate cost control, management normally looks into: a. All variances b. Favorable variances only c. Unfavorable variances only d. Both favorable and unfavorable variances that exceed a predetermined quantitative measure such as a percentage or dollar amount

d. Both favorable and unfavorable variances that exceed a predetermined quantitative measure such as a percentage or dollar amount

8. Responsibility reports for cost centers a. Distinguish between fixed and variable costs b. Use static budget data c. Include both controllable and non-controllable costs d. Include only controllable costs

d. Include only controllable costs

6. The advantages of standard costs include all of the following except a. Management by exception may be used b. Management planning is facilitated c. This may simplify the cost of inventories d. Management must use a static budget

d. Management must use a static budget

7. Which of the following is correct about the total overhead variance? a. Budgeted overhead and budget overhead applied are the same b. Total actual overhead is composed of variable overhead, fixed overhead and period costs c. Standard hours actually worked are used in computing the variance d. Standard hours allowed for the work done is the measure used in computing the variance

d. Standard hours allowed for the work done is the measure used in computing the variance

Costs incurred indirectly and allocated to a responsibility level are considered to be non-controllable at that level. True or False

true