Accounting Final Study Set

Cost per equivalent unit =

(cost of beginning work in process inventory + cost of added during the period)/equivalent units of production

Budgeted production =

(estimated) units sold + desired ending inventory - beginning inventory

ROI =

(net operating income/sales) x (sales/average sales)

Which of the following is a nonmanufacturing business where costing would most likely be used? A beauty shop A tailoring shop A laboratory that tests water samples for lead A furniture repair shop

A laboratory that tests water samples for lead

The comprehensive set of budgets that serves as a company's overall financial plan is commonly known as: An integrated budget A pro-forma budget A master budget A financial budget

A master budget

What is a duration driver?

A measure of the amount of time needed for an activity

Activity based costing

A method of allocating overhead based on each product's use of activities in making the product

What is a static budget?

A projection of budget data at one level of activity

Flexible budget

A projection of budget data for various levels of activity

A manufacturer's raw-material purchasing department would likely be classified as a: A) cost center. B) purchasing center C) profit center. D) investment center. E) contribution center.

A) Cost center

A cost center manager: A) does not have the ability to produce revenue. B) may be involved with the sale of new marketing programs to clients. C) would normally be held accountable for producing an adequate return on invested capital. D) often oversees divisional operations. E) may be the manager who oversees the operations of a retail store.

A) does not have the ability to produce revenue.

Predetermined overhead rate rely upon estimated data because...

Actual overhead for the period is not known until the end of the period Actual overhead costs can fluctuate costs can fluctuate seasonally, thus misleading decision makers

What are examples of job costing?

Aircraft manufacturing Large-scale construction Movie production

What is manufacturing overhead?

All costs of manufacturing other than direct materials and direct labor

Sunk cost

Amounts that have already been expensed and should not influence future actions

Factory overhead budget

Applies overhead based on direct labor hours

What is an achievable standard?

Are realistically within reach and take into account normal spoilage and inefficiency

What is a standards?

Are the predetermined expectations of the inputs necessary to achieve a unit of output

The term outsourcing is most closely associated with: A) Special-order decisions B) Make-or-buy decisions C) Equipment replacement decisions

B) Make-or-buy decisions

Which of the following is not an example of a responsibility center? A) Cost center. B) Contribution center. C) Profit center. D) Investment center.

B) contribution center

What are the similarities between job-order and process costing?

Both systems assign material, labor, and overhead costs to products and they provide a mechanism for computing unit product costs Both systems use the same manufacturing accounts The flow of costs through the manufacturing accounts is basically the same in both systems

The difference between the revenue or cost projection that a person provides, and a realistic estimate of the revenue or cost is called: Flexible budgeting Budgetary slack False budgeting Participating budgeting

Budgetary slack

The ROI calculation will indicate: A) the percentage of each sales dollar that is invested in assets. B) the sales dollars generated from each dollar of income. C) how effectively a company used its invested capital. D) the invested capital generated from each dollar of income. E) the overall quality of a company's earnings.

C) how effectively a company used its invested capital.

The concepts and tools used to measure the performance of people and departments are known as: A) strategic tools B) planning and control C) responsibility accounting D) delegation of decision making

C) responsibility accounting

Product-level activities

Carried out the product level, no matter the volume of production

What is a master budget?

Consists of many individual building blocks that are tied together in logical harmony and reflect the organization's financial plan

Continuous (rolling) budget

Constantly updated to relate to the next 12 months or next 4 quarters

Profit centers

Control both costs and revenue

How do applied overhead costs get debit and credited?

Credit factory overhead Debit work in process

Which of the following manufacturers would most likely use job-order costing? Chemical manufacturers Microchip processors Custom-furniture manufactures Gasoline refiners Fertilizer manufacturers

Custom-furniture manufacturers

Budgets: A) Communicate financial goals throughout the organization B) Allocate resources within the organization where they can be used most effectively C) Coordinate the plans and actives of departmental managers D) All of the above

D) All of the above

All of the following actions are likely to increase ROI except: A) an increase in sales revenues. B) a decrease in operating expenses. C) a decrease in a company's invested capital. D) a decrease in the number of units sold. E) an improvement in manufacturing efficiency.

D) a decrease in the number of units sold.

A responsibility center in which the manager is held accountable for the profitable use of assets and capital is commonly known as a (n): A) cost center. B) revenue center. C) profit center. D) investment center. E) contribution center.

D) investment center

ROI is most appropriately used to evaluate the performance of: A) cost center managers. B) revenue center managers. C) profit center managers. D) investment center managers. E) both profit center managers and investment center managers.

D) investment center managers

How is labor cost tracked in job costing?

Daily time sheet

How do actual overhead costs get debit and credited?

Debit factory overhead Credit logical offsetting accounts

What is a production budget?

Details planned levels of production

What is the purpose of a balanced scorecard?

Develops an array of performance measures

Conversion costs

Direct labor and manufacturing overhead may be combined into on classification of product cost

Static budget

Does not change with fluctuation in activity

Investment centers

Evaluated on costs, profits, and amount of investment capital deployed

What does the direct materials purchases show?

Expected direct materials purchases and related cash payments

Where should the master budget start from?

Expected sales

The salaries of a manufacturing plant's management are said to arise from: Unit-level activities Batch-level activities Product-level activities Facility-level activities

Facility-level activities

Job costing sheets contain entries for actual direct materials, actual direct labor, and actual manufacturing overhead cost incurred in completing a job... True False

False

The amount of overhead applied to a particular job equals the actual amount of overhead caused by the job... True False

False

As soon as products are completed, their product costs are transferred from raw materials inventory to finished-goods inventory... True False

False, the statement should say "from work-in process inventory to finished-goods"

Why is a static budget developed?

For single use activities

What is the ROI looking at?

How much profit can I generate with $1

What are the reasons for refining a costing system?

Increase in product diversity Increase in indirect costs with different cost drivers Competition in product markets

How can ROI be improved?

Increasing sales Reducing expenses Decreasing deployed assets

Cost centers

Incur costs but lack revenues

What is residual income?

Internal financial assessment technique used to help scale the relative success or failure of specific business activities

What is segment?

Is a discrete business unit for which separate financial information is prepared and evaluated by an operating decision maker within the organization

Why is a factory overhead account not a typical account?

It does not represent an asset, liability, expense, or any other element of financial statements It is a suspense or clearing account

Relevant costs

Items where future costs and revenues are expected to differ for the alternatives

A custom-home builder would likely utilize: Job-order costing Process costing Mass customization Process budgeting Joint costing

Job-order costing

Overapplied overhead

Less has been spend than anticipated for the level of achieved production

Bottom-up method

Lower-level managers develop the budget

What are the benefits of decentralization in organizations?

Lower-level managers gain experience in decision-making Lower-level decisions often based on better information Top management freed to concentrate on strategy Lower-level managers can respond quickly to customers Decision-making authority leads to job satisfaction

How are materials tracked in job costing?

Materials requisition

What are the disadvantages to decentralization in organizations?

May be a lack of coordination among autonomous managers Lower-level managers may make decisions without seeing the big picture Lower-level manager's objectives may not be those of the organizations May be difficult to spread innovative ideas in the organization

What are the advantages of the bottom-up method?

May improve employee morale and job satisfaction Prepared by those with best knowledge of own specific areas of operation

What are the disadvantages of the bottom-up method?

More time consuming and expensive to develop and administer Managers may try to pad their budgets, giving room for mistakes and inefficiency

Budget slack

Occurs when individuals attempt to create an environment where budgeted goals are met or exceeded

Unit-level activities

One-to-one correspondence with a unit of output

What kind of overhead is favorable?

Overapplied overhead

How to find the predetermined overhead rate

POHR = estimated total manufacturing overhead cost for the coming period/estimated total unites in the allocation base for the coming period

When an organization involves its many employees in the budgeting process in a meaningful way, the organization is said to be using an approach most commonly known as: Budgetary slack Participating budgeting budget padding

Participating budgeting

Why is a budget important?

Plans for the future Helps plan for their financial affairs to achieve financial success Translates general plans into specific, action oriented goals and objectives Provides a mechanism for identifying and focusing on departures from the plan Introduces responsible accounting

In job-costing, how might overhead be tracked?

Predetermined application (overhead) rate

What are the differences between job-costing and process costing?

Process costing is used when a single product is produced on a continuing basis. Job-order costing is used when many different jobs having different production requirements are worked on each period. Process costing systems accumulate costs by department. Job-order costing systems accumulates costs by individual job. Process costing systems compute unit costs by department. Job-order costing systems compute unit costs by job on the job cost sheet.

What drives the direct labor budget?

Production

What drives the direct materials purchases budget?

Production

What is the purpose of a cost of production report?

Provide comprehensive information on the material. labor, and overhead incurred within each department during a period

What is the direct labor budget?

Provides the framework for planning staffing needs and costs

What are some examples of segments?

Region Territory Division Product Category Department

Entity-sustaining (facility level) activities

Relate to an entity's ability to operate, independent of business volume

Customer-level activities

Relate to each customer, independent of the volume of goods and services provided to the specific customer

Batch-level activities

Relate to one or more units together

Market-level activities

Relate to the number of markets in which an entity operates, independent of the number of products, customers, etc.

Cost of production report

Reports to show the inventory control, efficiency studies, incentives pay plans, and the like

Zero-based budget

Requires each expenditure to be justified for the new budget period

What drives the production budget?

Sales

What are the components of a master budget?

Sales SG&A costs Materials Labor Overhead

What is a sales budget?

Shows the forecasted sales volume and cash collection

Process costing is used for one of the following: Different and produced continuously Similar and produced continuously Individual units produced to customer specifications Purchased from vendors

Similar and produced continuouslyq

What is a traction driver?

Simple count of the number of times an activity occurs

When is job costing best suited for?

Situations where goods and services are produced upon receipt

What are the different ways equivalent units can be calculated?

The FIFO method The weighted average method

Top-down method

The budget is coming from top level managers

What is the responsibility center?

The part of an organization under the control of a manager

Underapplied overhead

The result from lower levels of output or overspending

What must managers be held responsible for?

Their decisions and related execution

What are ideal standards?

These standards may never be reached and represent what will result in a state of perfection without spoiled goods, worker fatigue, or errors

Centralized style

Top leaders make and direct most important decisions

Decentralized

Top management concentrates on strategy Day-to-day operations and decision-making tasks are left to lower-level personnel

Two common types of activity measures:

Traction drivers and duration driver

The direct method

Transfers the cost of a service department directly to the productive (operating) department that rely on the services

A cost center manager does not have the ability to produce revenue. True False

True

Companies that use a process-cost accounting system would establish a separate work-in-process inventory account for each manufacturing department... True False

True

Direct labor and manufacturing overhead often are combined into a single cost category termed conversion costs True False

True

Flexible budgets reflect a company's anticipated costs based on variations in activity level... True or false

True

Job-costing methods are used in a variety of service industry firms and nonprofit organizations... True False

True

Manufacturing overhead is a pool of indirect production costs that must somehow be attached to each unit manufactured... True False

True

The direct method ignores the fact that some service departments provide service to other service departments... True or false

True

The flow costs through the manufacturing accounts is essentially the same in both process costing and job-order costing... True False

True

What kind of overhead is unfavorable?

Underapplied

In job costing are materials unique or similar?

Unique

In an activity-based costing system, direct materials used would typically by classified as a: Unit-level cost Batch-level cost Product-level cost

Unit-level cost

Incremental budget

Uses the prior year's budget at the starting point for the current budget

Do you want a higher or lower number for ROI?

Want a higher number for ROI, it is measuring profitability

What should standards include?

Waste Spoilage Human mistakes Rest time

Why do we use estimated overhead in job-costing?

We can't charge customers twice for overhead at the end of the year when we find out the actual

Cost objects

With ABC, are broadened to include not only products/services but also other objects like customers, markets, etc.

Which of the following statements concerning job costing systems is incorrect? a. Cost drivers are those items which cause actual overhead to exceed applied overhead. b. Job costing systems are appropriate to both manufacturing and service businesses. c. Traditionally, direct labor has been a very popular overhead application base. d. In a service business, indirect costs of providing a service are treated as overhead and applied in a manner similar to that for factory overhead.

a. Cost drivers are those items which cause actual overhead to exceed applied overhead

The overhead application rate is calculated by: a. Dividing the estimated factory overhead by the estimated application base. b. Dividing estimated per unit factory overhead by the sum of the per unit cost for direct labor and direct materials. c. Multiplying the estimated factory overhead by the estimated application base. d. Dividing the estimated application base by the estimated factory overhead.

a. Dividing the estimated factory overhead by the estimated application base

An equivalent unit of material is equal to: a. The amount of material necessary to complete one unit of production. b. The amount of material necessary to start a unit of production into work in process. c. Half of the material necessary to complete one unit of finished goods. d. An equivalent unit of conversion cost.

a. The amount of material necessary to complete one unit of production.

Under normal circumstances the Work in Process account used in a job costing system: a. Will include charges for direct labor, direct materials, and applied overhead. b. Will include only charges for direct materials and applied overhead. The labor is charged to expense as incurred. c. Will include charges for direct labor, direct materials, and actual overhead. d. Will include only charges for direct labor and direct materials.

a. Will include charges for direct labor, direct materials, and applied overhead

A ____________budget covers a one-year period; however, a new month is added as the current month is completed. a. continuous b. materials c. cash d. expenses

a. continuous

In a manufacturing system the three cost elements which flow into work in process are ____________, ____________, and ____________. a. direct labor, direct materials, factory overhead b. direct labor, indirect materials, indirect factory overhead c. indirect labor, indirect materials, factory overhead d. indirect labor, direct materials, factory overhead

a. direct labor, direct materials, factory overhead

In a cash budget the ____________section provides a schedule of borrowings and repayments and also discloses the related interest payment on borrowed funds. a. financing b. materials c. management d. factory overhead

a. financing

A business unit is known as a profit center: a. if its management is held accountable for both revenues and expenses, and has the authority to make decisions regarding its products, markets, and sources of supply. b. if its management is compensated based on the level of profitability. c. if its management is evaluated not only on revenues and expenses but also on asset investment. d. if its operations or departments are not directly involved in revenue generating activities, but instead focus on elements of cost control (including choosing the source of supply).

a. if its management is held accountable for both revenues and expenses, and has the authority to make decisions regarding its products, markets, and sources of supply.

A(n) ____________center is the most complex of the responsibility centers. a. investment b. cost c. business d. complex

a. investment

One of the first steps in preparing a cost of production report is to analyze the ____________ of goods. a. physical flow b. cost c. job cost d. cost allocation

a. physical flow

The ____________budget is probably the most important element of a master budget. a. sales b. expenses c. materials collection d. cost of goods sold

a. sales

A ____________ is the expected quantity or cost of input required in producing a good or service. a. standard b. budget c. expenses d. variance

a. standard

A ____________reveals the standard quantity and price of the production components necessary to produce a single unit of output. a. standard cost sheet b. variance cost sheet c. production sheet d. component sheet

a. standard cost sheet

After recording actual and applied overhead in the factory overhead account, a resulting debit balance would indicate ________factory overhead. a. underapplied b. overapplied c. actual d. estimated

a. underapplied

Which of the following statements concerning job cost sheets is incorrect? a. A job cost sheet would show the direct materials used on that specific job. b. A job cost sheet would reveal the selling costs associated with a particular job. c. The total costs recorded on a job cost sheet should also be reflected in the Work in Process account in the general ledger. d. The amount of overhead on a job cost sheet is the applied factory overhead rather than the actual factory overhead.

b. A job cost sheet would reveal the selling costs associated with a particular job

The appropriate journal entry to record the application of overhead in a job costing system involves a debit to Work in Process and a credit to: a. Cost of Goods Sold b. Factory Overhead c. Cash d. Income Summary

b. Factory Overhead

Which cost accumulation procedure is best suited to the continuous mass production of similar units? a. Job order b. Process c. Standard d. Actual

b. Process

____________ is a method under which departments are divided into activities, and the cost of individual activities are applied to cost objects. a. applied costing b. activity based costing c. job costing d. management costing

b. activity based costing

A ___________ focuses on financial and nonfinancial performance aspects, identifying key metrics that are consistent with the overall entity objectives. a. metrics b. balanced score card c. performance and objective card d. performance goal

b. balanced score card

A ____________ budget is a formal quantitative expression of management expectations. a. cost expectations b. budget c. expenses d. cost accounting

b. budget

The process costing report documenting the units and costs which flow through a manufacturing department is called a ____________report. a. job costing b. cost of production c. time sheet d. management costing

b. cost of production

A budgetary restriction occurring in advance of the related expenditure is often known as an ____________. a. slack b. encumbrance c. variance d. requisition

b. encumbrance

Items not easily traced to individual jobs like sandpaper, lubricants, and so on are considered to be ____________. a. direct materials b. indirect materials c. indirect labor d. direct labor

b. indirect materials

Materials are kept in a storeroom or warehouse and issued upon receipt of a ____________ a. cost requisition b. materials requisition c. materials collection d. warehouse requisition

b. materials requisition

Equivalent units should be separately calculated for ____________and ____________. a. cost of production, cost of finished inventory b. materials, conversion c. job, process d. material, job

b. materials, conversion

A ____________ report furnishes management with feedback of operating results and is used for purposes of evaluation and control. a. evaluation b. performance c. control d. inventory

b. performance

The preparation of budgeted financial statements is often called the preparation of ____________ statements. a. financial b. pro forma c. management d. cost

b. pro forma

The ____________system is often employed in steel, petroleum, chemical, and other similar types of industries. a. management costing b. process costing c. job costing d. industry costing

b. process costing

To measure the success or failure of an investment center manager, many companies employ a measure known as ____________. a. return on assets b. return on investment c. return on debt d. return on inventory

b. return on investment

With the ____________approach, upper-level executives can study the interactions of lower units and determine the consistency of each unit's plans and expectations. a. management b. top-down c. just-in-time d. interactive

b. top-down

In contrast to incremental budgeting, ____________ requires that each expenditure be rejustified for each budget period. a. Justified budgeting b. zero-based budgeting c. slack budgeting d. expenditure budgeting

b. zero-based budgeting

The Factory Overhead account in a job costing system is credited for the: a. Excess of applied overhead over actual overhead. b. Actual overhead. c. Applied overhead. d. Indirect materials and indirect labor.

c. Applied overhead

The appropriate journal entry to transfer the cost of completed units from the Work in Process account would involve a credit to Work in Process and a debit to which of the following accounts? a. Income Summary b. Raw Materials Inventory c. Finished Goods d. Manufacturing Summary

c. Finished Goods

With the top-down budgeting approach the budget: a. Process begins with the issuance of general budget guidelines by top management or a budget committee. b. Developmental process centers on lower-level employee participation. c. Is imposed on lower-level personnel who do not become involved in the budget construction process in a significant way. d. Is not characterized by sound budget preparation practices.

c. Is imposed on lower-level personnel who do not become involved in the budget construction process in a significant way

Another name for "pro-forma financial statements" would be: a. Corrected financial statements. b. Historical-cost financial statements. c. Projected financial statements. d. Computer-generated financial statements.

c. Projected financial statements

An accounting system wherein the operations are broken down into cost centers controllable by a foreman, sales manager, or supervisor, is known as: a. Control accounting b. Budgetary accounting c. Responsibility accounting d. Allocated cost accounting

c. Responsibility accounting

Which of the following is not one of the objectives in utilizing standard costs? a. To simplify costing procedures and expedite cost reports. b. To allow management to readily determine, and focus attention on, special problem areas. c. To allow a measure of cost assuming ideal or perfect operating conditions. d. To provide a measure of budgeted cost for a single unit of activity.

c. To allow a measure of cost assuming ideal or perfect operating conditions.

A(n) ____________ standard is one that can be achieved by efficient but not perfect operations. a. efficient b. perfect c. achievable d. variance

c. achievable

From a conceptual point of view, cost objects drive the need for ____________and activities consume ___________.. a. job b. order c. activities, resources d. management

c. activities, resources

The ____________ method is time consuming and expensive to administer because of increased employee involvement. a. employee b. top-down c. bottom-up d. interactive

c. bottom-up

A __________is a responsibility unit in which a manager is held accountable for cost incurrence. a. expense center b. revenue center c. cost center d. expense unit

c. cost center

___________ are the factors that cause specific costs to be incurred within an organization. a. expenses b. cost of goods sold c. cost drivers d. indirect labor

c. cost drivers

The ____________account is adjusted for under- or overapplied overhead. a. sales b. factory overhead c. cost of goods sold d. expenses

c. cost of goods sold

The computation and examination of variances is consistent with the concept of management by ____________ a. standards b. cost c. exception d. expectations

c. exception

The ___________budget incorporates all production costs other than direct material and direct labor. a. direct materials b. materials c. factory overhead d. direct labor

c. factory overhead

The applied overhead is credited to the ____________account. a. cost b. expense c. factory overhead d. sales

c. factory overhead

With a ____________ system, costs are gathered by job or order. a. job b. order c. job cost d. management

c. job cost

The cost of each job is accumulated on a separate ____________. a. total cost sheet b. management cost sheet c. job cost sheet d. management sheet

c. job cost sheet

___________ costs are expensed under traditional costing methods, but may partially be allocated to individual products under activity-based costing. a. activity b. order c. period d. job

c. period

In a process costing system, costs are accumulated by ___________or___________ for a specified period of time. a. job, process b. type, cost accounting c. process, department d. process, type

c. process, department

Intentionally overstating various anticipated costs is called budgetary ____________ . a. variances b. cost c. slack d. overstating

c. slack

Labor costs are accumulated by means of ____________ and labor summaries. a. job sheets b. order sheets c. time sheets d. cost sheets

c. time sheets

The identification of activities is facilitated by dividing business processes into levels. These levels include: ____________,____________, ____________, ____________, or ____________. a. direct labor, direct materials, indirect labor, indirect materials, cost of goods sold b. direct labor, direct materials, indirect labor, indirect materials, overhead c. unit, batch, product, customer, market d. advertising, marketing, management, labor, material

c. unit, batch, product, customer, market

Which of the following statements is incorrect? a. The cash budget is an element of a master budget. b. The direct labor budget is specifically dependent on the production budget. c. The budgeting process would normally begin with preparation of a sales budget. d. A continuous budget is feasible only for sales projections.

d. A continuous budget is feasible only for sales projections

The basic difference between a static budget and a flexible budget is that: a. A flexible budget considers only variable costs, but a static budget considers all costs. b. Flexible budgets allow management latitude in meeting goals, whereas a static budget is based on a fixed standard. c. A static budget is for an entire production facility, but a flexible budget is applicable only to a single department. d. A static budget is based on one specific level of production and a flexible budget can be prepared for any production level within a relevant range.

d. A static budget is based on one specific level of production and a flexible budget can be prepared for any production level within a relevant range.

The theoretically correct method of allocating under- or overapplied overhead is to: a. Allocate the amount to cost of goods sold. b. Allocate the amount to finished goods. c. Allocate the amount to work in process and finished goods. d. Allocate the amount among work in process, finished goods, and cost of goods sold.

d. Allocate the amount among work in process, finished goods, and cost of goods sold

There are a number of benefits associated with budgeting. Which of the following is not frequently cited as a benefit of the budget process? a. Budgets can help identify production bottlenecks. b. Budgets are useful tools in performance evaluation. c. Budgets help provide an early warning for periods during which cash may be in short supply. d. Budgets eliminate the opportunity for slack or padding within an organization.

d. Budgets eliminate the opportunity for slack or padding within an organization

Which of the following statements about process cost accounting systems is false? a. Beginning units of work in process plus the units put into production should equal ending work in process units plus units completed. b. The cost flows in journal entries for process cost accounting systems and job order cost accounting systems are similar. c. Process cost accounting is well suited for those production processes where similar units are produced in a continuous flow. d. The equivalent units of production for materials and conversion costs are the same.

d. The equivalent units of production for materials and conversion costs are the same

With the job order cost system, a credit balance in the Factory Overhead account at the end of an accounting period would indicate: a. That an error in the job cost system has occurred. b. That the company lost money during the period. c. The presence of underapplied overhead. d. The presence of overapplied overhead.

d. The presence of overapplied overhead

Which of the following factors would be subject to evaluation in a balanced scorecard approach to performance evaluation? a. Financial outcomes b. Customer outcomes c. Business process outcomes d. all of the above

d. all of the above

____________ is the cost to convert raw material into finished products; more specifically, the sum of direct labor and factory overhead. a. finished goods cost b. material cost c. job cost d. conversion cost

d. conversion cost

____________ are those costs that are easily traced to a job and are charged to individual jobs that are worked on during the accounting period. a. job overhead b. overhead c. indirect cost d. direct cost

d. direct costs

The overhead application rate is computed by dividing ____________factory overhead by the ____________ application base. a. actual, estimated b. actual, actual c. estimated, actual d. estimated, estimated

d. estimated, estimated

A process whereby performance assessment and corrective measures focus on what has gone wrong: ____________ a. corrective process b. performance process c. management process d. management by exception

d. management by exception

A ____________ budget is a comprehensive set of integrated budgets that serve as the financial plan for the entire organization. a. company b. organizational c. slack d. master

d. master

In a cash budget, the ____________ section discloses the total cash available during the period before considering any disbursement. a. cost b. expenses c. materials d. receipts

d. receipts

The ____________ is the amount of input that should have been used in manufacturing activities during the period. a. actual quantity b. expected quantity c. variance quantity d. standard quantity

d. standard quantity

A ____________ budget is a budget developed for one level of activity. a. activity b. cost c. variance d. static

d. static

Residual income =

operating income - (operating assets X cost of capital)