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Which of the following is an example of an organization-sustaining activity? Multiple Choice Assembling products Setting up machines Advertising products Heating a manufacturing facilityCorrect

Heating a manufacturing facility

Which of the following statements is true? Multiple Choice Variable costing treats direct materials as a period cost. Variable costing treats direct labor as a period cost. Variable costing treats variable manufacturing overhead as a period cost. Variable costing treats fixed manufacturing overhead as a period cost.

Variable costing treats fixed manufacturing overhead as a period cost.

Which of the following statements is true? Multiple Choice A batch-level activity cost will decrease as the number of units in the batch increases. A batch-level activity cost will increase as the number of units in the batch increases. A batch-level activity cost is unaffected by the number of units in the batch.Correct Batch-level activity costs are often used in traditional absorption costing systems to allocate batch-level costs.

A batch-level activity cost is unaffected by the number of units in the batch

Which of the following statements is true? rev: 06_24_2020_QC_CS-208650 Multiple ChoiceA planning budget is prepared before the period begins and is valid for only the actual level of activity.A planning budget is prepared after the period ends and is valid for only the planned level of activity.A planning budget is prepared before the period begins and is valid for only the planned level of activity.CorrectA planning budget is prepared after the period ends and is valid for only the actual level of activity

A planning budget is prepared before the period begins and is valid for only the planned level of activity.

Which of the following statements is false? Multiple Choice Absorption costing treats fixed administrative expense as a period cost. Absorption costing treats sales commissions as a period cost. Absorption costing treats fixed manufacturing overhead as a period cost. Absorption costing treats variable manufacturing overhead as a product cost.

Absorption costing treats fixed manufacturing overhead as a period cost.

Which of the following is an example of a product-level activity? Multiple Choice Assembling products Setting up machines Advertising productsCorrect Heating a manufacturing facility

Advertising products

Which of the following equations is used to prepare a production budget? Multiple ChoiceBudgeted unit sales − Desired units of ending finished goods inventory + Units of beginning finished goods inventory = Required production in unitsBudgeted unit sales + Desired units of ending finished goods inventory − Units of beginning finished goods inventory = Required production in unitsCorrectBudgeted unit sales + Desired units of beginning finished goods inventory − Units of ending finished goods inventory = Required production in unitsBudgeted unit sales − Desired units of beginning finished goods inventory + Units of ending finished goods inventory = Required production in units

Budgeted unit sales + Desired units of ending finished goods inventory − Units of beginning finished goods inventory = Required production in units

Which of the following statements is false? Multiple ChoiceBudgets force managers to think about and plan for the future.Budgets define goals and objectives that can serve as benchmarks for evaluating subsequent performance.Budgets enable each department to function independently from other departments.CorrectBudgets communicate management's plans throughout the organization.

Budgets enable each department to function independently from other departments.

Which of the following is an example of a duration driver? Multiple ChoiceNumber of machine-setups.Quantity of customer orders received.Direct labor-hours.CorrectDollars spent on advertising.

Direct labor-hours.

In absorption costing, a complete definition of unit product cost includes: Direct materials, direct labor, and variable manufacturing overhead. Direct materials, direct labor, variable manufacturing overhead, and variable selling and administrative expenses. Direct materials, direct labor, variable manufacturing overhead, and fixed manufacturing overhead.Correct Direct materials and direct labor.

Direct materials, direct labor, variable manufacturing overhead, and fixed manufacturing overhead

Which of the following equations is false with respect to the direct materials budget? Multiple ChoiceUnits of raw materials to be purchased × unit cost of raw materials = cost of raw material purchasesUnits of raw materials needed to meet production + desired units of ending raw materials inventory − units of beginning raw materials inventory = units of raw materials to be purchasedRequired production in units of finished goods × units of raw materials needed per unit of finished goods = units of raw materials needed to meet productionEstimated sales in units of finished goods × units of raw materials needed per unit of finished goods = units of raw materials needed to meet production

Estimated sales in units of finished goods × units of raw materials needed per unit of finished goods = units of raw materials needed to meet production

Which of the following statements is true? Multiple Choice In absorption costing, variable manufacturing overhead costs flows through the inventory accounts on the balance sheet before being recorded as part of cost of goods sold on the income statement.Correct In absorption costing, variable manufacturing overhead costs flows through the inventory accounts on the balance sheet before being recorded as part of selling and administrative expenses on the income statement. In absorption costing, variable manufacturing overhead costs flows through the inventory accounts on the balance sheet before being recorded as sales revenue on the income statement. In absorption costing, variable manufacturing overhead costs are recorded as period expenses on the income statement as incurred.

In absorption costing, variable manufacturing overhead costs flows through the inventory accounts on the balance sheet before being recorded as part of cost of goods sold on the income statement.

Which of the following is not one of the sections within a cash budget? Multiple ChoiceThe financing sectionThe investing sectionCorrectThe cash receipts sectionThe cash disbursements section

Investing section

Which of the following statements is false with respect to a budgeted income statement? Multiple ChoiceIts net income should equal the net cash flows from the cash budget.CorrectIts net income will impact the ending retained earnings balance shown on the balance sheet.Its interest expense flows from the financing section of the cash budget.Its selling and administrative expenses may include depreciation expense.

Its net income should equal the net cash flows from the cash budget.

When the units produced are less than the units sold, which of the following equations explains the difference between absorption costing and variable costing net operating income? Multiple Choice Number of units released from ending inventory × fixed manufacturing overhead cost per unitCorrect Number of units deferred in ending inventory × fixed manufacturing overhead cost per unit Number of units deferred in ending inventory × variable manufacturing overhead cost per unit Number of units released from ending inventory × variable manufacturing overhead cost per unit

Number of units released from ending inventory × fixed manufacturing overhead cost per unit

Which of the following statements is true? Multiple ChoicePlanning involves developing goals and preparing various budgets to achieve those goals.CorrectPlanning involves gathering feedback that enables organizations to make modifications as circumstances change.The definition of planning states that managers should be held responsible for those items—and only those items—that the manager can actually control.Planning is usually done independent from the budgeting process.

Planning involves developing goals and preparing various budgets to achieve those goals.

Which of the following is an example of a batch-level activity? Multiple Choice Assembling products Setting up machines Correct Advertising products Heating a manufacturing facility

Setting up machines

The standard direct material cost per unit of finished goods is computed in which of the following ways? Multiple Choice Standard quantity per unit of direct material × standard price per unit of direct material Standard quantity per unit of finished goods × standard price per unit of finished goods Standard quantity per unit of direct material × standard price per unit of finished goods Standard quantity per unit of finished goods × standard price per unit of direct material

Standard quantity per unit of finished goods × standard price per unit of direct material

he standard direct material cost per unit of finished goods is computed in which of the following ways? Multiple ChoiceStandard quantity per unit of direct material × standard price per unit of direct materialStandard quantity per unit of finished goods × standard price per unit of finished goodsStandard quantity per unit of direct material × standard price per unit of finished goodsStandard quantity per unit of finished goods × standard price per unit of direct material

Standard quantity per unit of finished goods × standard price per unit of direct material

Which of the following statements is true? rev: 06_24_2020_QC_CS-208650 Multiple ChoiceThe activity variance for a variable expense will usually equal zero.The activity variance for a variable expense will be unfavorable if the actual level of activity is greater than the planned level of activity.CorrectThe activity variance for a variable expense will be unfavorable if the actual level of activity is less than the planned level of activity.The activity variance for a variable expense can be favorable or unfavorable depending on whether the actual expense incurred is greater than or less than the planned expense.

The activity variance for a variable expense will be unfavorable if the actual level of activity is greater than the planned level of activity.

Which of the following statements is true? rev: 06_24_2020_QC_CS-208650 Multiple ChoiceThe activity variance for revenue will usually equal zero.The activity variance for revenue will be unfavorable if the actual level of activity is greater than the planned level of activity.The activity variance for revenue will be unfavorable if the actual level of activity is less than the planned level of activity.CorrectThe activity variance for revenue can be favorable or unfavorable depending on whether the actual revenue earned is greater than or less than the planned revenue.

The activity variance for revenue will be unfavorable if the actual level of activity is less than the planned level of activity.

Which of the following estimates is not used in preparing a sales budget including a schedule of expected cash collections? Multiple ChoiceThe number of units soldThe selling price per unitThe percent of next quarter's unit sales in ending inventoryCorrectThe credit sales collection pattern

The percent of next quarter's unit sales in ending inventory

Which of the following statements is true? Multiple ChoiceThe spending variance for a fixed expense will equal zero when the planned level of activity equals the actual level of activity.The spending variance for a fixed expense will be favorable if the amount of the expense contained in the flexible budget is greater than the actual amount of the expense.CorrectThe spending variance for a fixed expense will be favorable if the amount of the expense contained in the flexible budget is less than the actual amount of the expense.The spending variance for a fixed expense can be favorable or unfavorable depending on whether the actual expense is greater than or less than the planned expense.

The spending variance for a fixed expense will be favorable if the amount of the expense contained in the flexible budget is greater than the actual amount of the expense.

Which of the following statements is true? Multiple Choice When the units produced are greater than the units sold, absorption costing income will be greater than variable costing income because absorption costing defers some fixed manufacturing overhead cost in ending inventory whereas variable costing expenses each period's fixed manufacturing overhead on the income statement.Correct When the units produced are greater than the units sold, absorption costing income will be less than variable costing income because absorption costing defers some fixed manufacturing overhead cost in ending inventory whereas variable costing expenses each period's fixed manufacturing overhead on the income statement. When the units produced are greater than the units sold, absorption costing income will be greater than variable costing income because absorption costing defers some variable manufacturing overhead cost in ending inventory whereas variable costing expenses each period's variable manufacturing overhead on the income statement. When the units produced are greater than the units sold, absorption costing income will be less than variable costing income because absorption costing defers some variable manufacturing overhead cost in ending inventory whereas variable costing expenses each period's variable manufacturing overhead on the income statement.

When the units produced are greater than the units sold, absorption costing income will be greater than variable costing income because absorption costing defers some fixed manufacturing overhead cost in ending inventory whereas variable costing expenses each period's fixed manufacturing overhead on the income statement.

Which of the following statements is true? Multiple Choice When the units produced are less than the units sold, absorption costing income will be greater than variable costing income because absorption costing releases some fixed manufacturing overhead cost from ending inventory whereas variable costing expenses each period's fixed manufacturing overhead on the income statement. When the units produced are less than the units sold, absorption costing income will be less than variable costing income because absorption costing releases some fixed manufacturing overhead cost from ending inventory whereas variable costing expenses each period's fixed manufacturing overhead on the income statement.Correct When the units produced are less than the units sold, absorption costing income will be greater than variable costing income because absorption costing releases some variable manufacturing overhead cost from ending inventory whereas variable costing expenses each period's variable manufacturing overhead on the income statement. When the units produced are less than the units sold, absorption costing income will be less than variable costing income because absorption costing releases some variable manufacturing overhead cost from ending inventory whereas variable costing expenses each period's variable manufacturing overhead on the income statement.

When the units produced are less than the units sold, absorption costing income will be less than variable costing income because absorption costing releases some fixed manufacturing overhead cost from ending inventory whereas variable costing expenses each period's fixed manufacturing overhead on the income statement.

Assume that a company's planned level of activity is 1,100 hours and its actual level of activity is 1,000 hours. Based on this information, the company's activity variances for its variable expenses will: rev: 06_24_2020_QC_CS-208650 Multiple Choiceall be zero.all be favorable.Correctall be unfavorable.

all be favorable.

Assume that a company's planned level of activity is 1,000 hours and its actual level of activity is 1,100 hours. Based on this information, the company's activity variance for revenue will be: rev: 06_24_2020_QC_CS-208650 Multiple Choicezero.favorable.Correctunfavorable.either favorable or unfavorable depending on the cost formula.

favorable.

An activity variance is calculated by comparing the: rev: 06_24_2020_QC_CS-208650 Multiple Choiceplanning budget to the actual results.planning budget to the flexible budget.Correctflexible budget to the actual results.static budget to the actual results.

planning budget to the flexible budget.

Activity-based costing (ABC) is a costing method that provides managers with cost information for Multiple Choice preparing financial reports for external parties. strategic and other decisions that potentially affect capacity and therefore "fixed" as well as variable costs.Correct identifying relevant costs when choosing between alternatives. identifying the net present value of future cash flows associated with investment opportunities.

strategic and other decisions that potentially affect capacity and therefore "fixed" as well as variable costs.