Accounting Test 3 Review

most manufacturing plants are considered cost centers because they have control over

costs only

The budgeting process does NOT involve which of the following activities?

increase in sales by increasing marketing efforts

Which of the following is NOT a reason for a direct materials quantity variance?

increased material cost per unit

Mason Corporation had 1,101,000 in invested assets, sales of 1,238,000, income from operations amounting to 212,000, and a desired minimum rate of return of 15%. The investment turnover for Mason Corportation is

investment turnover= sales/ invested assets= 1,238,000/1,101,000= 1.12

The primary difference between static budget and a flexible budget is that a static budget

is a plan for a single level of production, whereas a flexible budget can be converted to any level of production

For higher levels of management, responsibility accounting reports

are more summarized than for lower levels of management.

A formal written statement of management's plans for the future, expressed in financial terms is a

budget

Which of the following is a measure of a cost center manager's performance?

budget performance report

Periodic comparisons between planned objectives and actual performance are reported in:

budget performance reports

Businesses that are separated into two or more manageable units in which managers have authority and responsibility for operations are said to be

decentralized

which is the best example of a decentralized operation

each unit is responsible for their own operations and decision making

which of the following budgets allow for adjustments in activity levels?

flexible budget

The first budget customarily prepared as part of an entity's master budget is the

sales budget

A favorable cost variance occurs when

standard costs are more than actual costs

the total manufacturing cost variance is

the difference between the actual costs and standard costs for units produced

Standard costs are used in companies for a variety of reasons. Which of the following is NOT one of the benefits for using standard costs?

used to indicate where changes in technology and machinery need to be made