Acctg 404 Exam #3

Which of the following statements is not correct?

The direct materials budget begins with the sales estimated for each period.

What is the main difference between static and flexible budgets?

The variable costs are adjusted in a flexible budget.

Which of the following does not describe a management control system?

a system that only measures profitability

The variable overhead efficiency variance is caused by the difference between which of the following?

actual and standard allocation base

The variable overhead rate variance is caused by the sum between which of the following?

actual and standard overhead rates

In centralized organizations, primary decisions are made by ________.

an individual at the top of the organization

In a centralized organization, where are goals established?

at the highest level of the organization and promoted downward

This standard is set at a level that may be reached with reasonable effort.

attainable standard

in a profit center, managers are held accountable for

both revenues and expenses

which type of budget is most likely to have the support of employees?

bottom up approach

which of the following is not part of the operating budget?

cash budget

What type of organization has major decisions made by a role at the top of the organization?

centralized organization

Which of the following is not a type of responsibility center?

concentrated cost center

Costs that a company or manager can influence are called ________.

controllable costs

quicker decisions and response time is an advantage of

decentralized organization

The cash budget is part of which category of budgets?

finance budget

Which budget evaluates the results of operations at the actual level of activity?

flexible budget

which budget allows management to evaluate results based on actual level of activity

flexible budget

Which of the following is a possible cause of an unfavorable labor rate variance?

hiring higher-quality workers at a higher wage

What are some possible reasons for a labor rate variance?

hiring of less qualified workers

An example of an uncontrollable cost would include all of the following except ________.

hourly rate of pay for the company's purchasing manager

This standard is set at a level that could be achieved if everything ran perfectly.

ideal standard

Strategic decisions occur ________.

infrequently and involve long-term decisions

budgeting--zero based budgeted requires

justification for all expeditures

what are some reasons for a material quantity variance?

more qualified workers

Segments are uniquely identifiable components of the business and can be categorized by all of the following except ________.

number of employees

what shows the structure of an organization?

organizational chart

A flexible budget ________.

predicts estimated revenues and costs at varying levels of production

Which of the following is not a part of budgeting?

preventing net operating losses

The direct materials budget is prepared using which budget's information?

production budget

Which of the following is an operating budget?

production budget

A responsibility center in which managers are held accountable for both revenues and expenses is called a ________.

profit center

A system that establishes financial accountability for operating segments within an organization is called ________.

responsibility accounting

Which of the operating budgets is prepared first?

sales budget

budgeting--which budget is typically prepared first?

sales budget

what is the main difference between static and flexible budgets?

the variable costs are adjusted in a flexible budget

This variance is the difference involving spending more or using more than the standard amount.

unfavorable variance

a variance that results from spending or using than the standard amount is

unfavorable variance

When is the material price variance unfavorable?

when the actual price paid is greater than the standard price

When is the material quantity variance favorable?

when the actual quantity used is less than the standard quantity

The most common budget is prepared for a ________.

year

Which approach requires management to justify all its expenditures?

zero-based budgeting