ACCT 302 Final MCQ pt 2

Which of the following is the correct formula for the materials price variance? A) (Actual price of input - Budgeted price of input) x Budgeted quantity of input B) (Actual quantity of input used - Budgeted quantity of input allowed for actual output) x Budgeted price of input C) (Actual price of input - Budgeted price of input) x Actual quantity of input D) (Actual quantity of input used - Budgeted quantity of input allowed for actual output) x Actual price of input

(Actual price of input - Budgeted price of input) x Actual quantity of input

Which of the following is true of flexible budget? A) It calculates total variable cost by multiplying actual units by budgeted variable cost per unit. B) It calculates total fixed cost by multiplying actual units by budgeted fixed cost per unit. C) It calculates revenues by multiplying budgeted units by actual selling price per unit. D) It calculates contribution margin by multiplying budgeted units by actual contribution margin per unit.

A) It calculates total variable cost by multiplying actual units by budgeted variable cost per unit.

Which of the following statements is true of budgets? A) Master budgets express management's operating and financial plans. B) Financial budgets are prepared before the master budget is prepared. C) Operating budgets are prepared independently of the master budget. D) The budgeted balance sheet is the first budget prepared as management is very much concerned with projected financial position

A) Master budgets express management's operating and financial plans.

________ is the usual starting point for budgeting. A) The revenues budget B) The estimated net income C) The production budget D) The cash budget

A) The revenues budget

Which of the following is a reason why top managers want lower-level managers to participate in the budgeting process? A) To benefit from their experience with the day-to-day aspects of running the business. B) To reduce the time and cost expended in the budgeting process. C) To ensure that they do not introduce any budgetary slack. D) To ensure that the budgets are administered rigidly given the changing market conditions.

A) To benefit from their experience with the day-to-day aspects of running the business.

Which of the following can be a reason for a favorable price variance for direct materials? A) a decrease in the price of materials due to an oversupply of materials B) an unexpected increase in the price of materials C) less amount of material used during production than planned for actual output D) workers taking less time to produce the products

A) a decrease in the price of materials due to an oversupply of materials

Which of the following information is needed to prepare a flexible budget? A) actual units sold B) actual variable cost C) actual selling price per unit D) actual fixed cost

A) actual units sold

A company's actual performance should be compared against budgeted amounts for the same accounting period so that ________. A) adjustments for future conditions can be included B) to avoid any feedback from the budgets due to past miscues C) inefficiencies of the past year can be included D) a rolling budget can be implemented

A) adjustments for future conditions can be included

The flexible budget contains ________. A) budgeted amounts for actual output B) static budget amounts for planned output C) actual costs for actual output D) actual costs for planned output

A) budgeted amounts for actual output

Which of the following is a financial budget? A) budgeted balance sheet B) cash receivables budget C) production budget D) cost of goods sold budget

A) budgeted balance sheet

Sensitivity analysis helps managers evaluate risks ________. A) by showing the effects of changes to the original data or an underlying assumption B) by identifying inconsistencies in underlying assumptions and actual conditions C) by removing the effects of foreign currency exposure and other uncontrollable factors D) by identifying gaps in the production process using information on setups needed to manufacture

A) by showing the effects of changes to the original data or an underlying assumption

ERP systems store vast quantities of information about the materials, machines and equipment, labor, power, maintenance, and setups needed to manufacture different products. This helps simplify the budgeting process as ERP systems ________. A) can quickly calculate the manufacturing and nonmanufacturing costs based on a given sales quantity B) automatically identify and record changes in processes involved in producing products C) identify which underlying assumptions are likely to change D) always use a rolling budget ensuring that a budget is always available for a specified future period

A) can quickly calculate the manufacturing and nonmanufacturing costs based on a given sales quantity

Participation of employees in the budgeting process helps ________. A) create greater commitment towards the budget B) create demanding but achievable budget C) decrease deviations from the budget D) secure communication of sensitive information

A) create greater commitment towards the budget

Which of the following is not true of a properly executed budgetary cycle? A) deviations from plan are only investigated at the conclusion of the fiscal year as actual data can be finally compiled B) past performance and market feedback are considered in setting budget amounts C) specific financial and nonfinancial expectations are set D) during the fiscal year, managers investigate deviations from plans

A) deviations from plan are only investigated at the conclusion of the fiscal year as actual data can be finally compiled

Which variance is calculated using the formula (AQ - BQ) BP is the ________. A) efficiency variance B) price variance C) total flexible-budget variance D) spending variance

A) efficiency variance

The number of units in the sales budget and the production budget may differ because of a change in ________. A) ending finished goods inventory levels B) total overhead charges for the year C) beginning direct material inventory levels D) sales returns and allowances

A) ending finished goods inventory levels

A limitation of using past performance as a basis for judging actual results is that ________. A) future conditions can be different from the past B) any undervaluation of profits in the past period is likely to continue C) any subsequent change in accounting treatment will distort performance evaluation D) they tend to distort results when current and past conditions are similar

A) future conditions can be different from the past

A master budget ________. A) is the initial plan of what the company intends to accomplish in the period and evolves from both the operating and financing decisions B) is only prepared for manufacturers as they are the only type of company with material purchases and work-in-process accounts. C) improves companies' market capitalization and evolves from both the investing and financing decisions D) is another name given to the financial budget

A) is the initial plan of what the company intends to accomplish in the period and evolves from both the operating and financing decisions

Budgets should ________. A) not be so rigid that if conditions change, adjustments in spending can be made B) be administered rigidly C) only be developed for short periods of time such as quarters D) include only variable costs

A) not be so rigid that if conditions change, adjustments in spending can be made

Which of the following is a component of operating budgets? A) production budget B) budgeted statement of cash flows C) capital expenditures budget D) budgeted balance sheet

A) production budget

If a sales-volume variance was caused by poor-quality products, then the ________ would be in the best position to explain the variance. A) production manager B) sales supervisor C) financial supervisor D) logistic manager

A) production manager

The order to follow when preparing the operating budget is ________. A) revenues budget, production budget, direct manufacturing labor costs budget , and cost of goods sold B) revenues costs of goods sold budget, production budget, and cash budget C) revenues budget, manufacturing overhead costs budget, and production budget D) cash expenditures budget, revenues budget, and production budget

A) revenues budget, production budget, direct manufacturing labor costs budget , and cost of goods sold

In general, which of the following budgets is prepared first? A) sales budget B) production budget C) direct labor budget D) overhead budget

A) sales budget

Standard cost per output unit for each variable direct cost input is calculated by multiplying ________. A) standard input allowed for one output unit by standard price per input unit B) standard input allowed for one output unit by actual price per input unit C) actual input allowed for one output unit by standard price per input unit D) actual input allowed for one output unit by actual price per input unit

A) standard input allowed for one output unit by standard price per input unit

Operating decisions primarily deal with ________. A) the best use of scarce resources B) how to obtain funds to acquire resources C) acquiring equipment and buildings D) satisfying stockholders

A) the best use of scarce resources

The use of activity-based budgeting is growing because of ________. A) the increased use of activity-based costing B) the increased use of kaizen costing C) increases in work-in-process inventory D) increases in direct materials inventory

A) the increased use of activity-based costing

Which of the following could be a reason for a favorable material price variance? A) the purchasing manager bargaining effectively with suppliers B) the purchasing manager giving orders for small quantity to reduce storage cost C) the purchasing manager accepting a bid from the highest-priced supplier to ensure the quality of material D) the personnel manager hiring underskilled workers

A) the purchasing manager bargaining effectively with suppliers

Best products, an Atlanta based company, is in the midst of its budgeting process. It has already prepared its direct materials usage budget and is now in the process of preparing its direct material purchase budget. In addition to the details gathered to prepare the direct materials usage budget, Best also must know ________. A) the target direct materials ending inventory B) the ratio of direct materials to cost of goods sold C) the beginning direct materials inventory level D) the quantity of direct materials to be purchased

A) the target direct materials ending inventory

Variance analysis should be used ________. A) to understand why variances arise and to improve future performance B) as the sole source of information for performance evaluation C) to punish employees that do not meet standards D) to set the standards which are very easy to achieve to encourage employees to focus on meeting standards

A) to understand why variances arise and to improve future performance

An unfavorable flexible-budget variance for variable costs may be the result of ________. A) using more input quantities than were budgeted B) paying lower prices for inputs than were budgeted C) selling output at a higher selling price than budgeted D) selling less quantity compared to the budgeted

A) using more input quantities than were budgeted

Which of the following is the basic formula of the direct materials usage budget? A) Ending inventory of direct materials + direct materials purchased and used during the period = direct materials to be used this period B) Beginning inventory of direct materials + direct materials purchased and used during the period = direct materials to be used this period C) units used in production + target ending inventory - beginning inventory = purchases to be made for the budget period D) units used in production + target beginning inventory - ending inventory = purchases to be made for the budget period

B) Beginning inventory of direct materials + direct materials purchased and used during the period = direct materials to be used this period

In which order are the following developed? First to last: A = Production budget B = Direct materials costs budget C = Budgeted income statement D = Revenues budget A) ABDC B) DABC C) DCAB D) CABD

B) DABC

________ include a budgeted statement of cash flows and a budgeted balance sheet. A) Revenue budgets B) Financial budgets C) Operating budgets D) Production budgets

B) Financial budgets

Which of the following is true of master budgets? A) They include only financial aspects of a plan and exclude nonfinancial aspects. B) Includes both financial and nonfinancial aspects of management's plans. C) They aid in quantifying the expectations of all stakeholders. D) They must be administered rigidly after they are committed to.

B) Includes both financial and nonfinancial aspects of management's plans.

Which of the following best describes a rolling budget? A) It is a budget that continually outlines the amount required to roll over debt in a future period. B) It is created continually by adding a month, quarter, or year to the period just ended C) It is a budget that outlines budgeted expenses while utilizing a moving average D) It is a budget that is submitted to a bank at the beginning of every month as per a loan covenant.

B) It is created continually by adding a month, quarter, or year to the period just ended

Which of the following is true of variance? A) Managers should interpret a favorable variance as "good news". B) Managers should not simply interpret a favorable variance as good but should understand why the variance occurred. C) A small variance or zero variance definitively reveals efficient performance. D) Managers' performance must be evaluated solely on single variance.

B) Managers should not simply interpret a favorable variance as good but should understand why the variance occurred.

Which of the following is a disadvantage of using the standards developed by a firm itself to develop a budget? A) A firm's inefficiencies will be part of the data. B) They are not based on realized benchmarks and can be unrealistic C) The expected future changes are not included in the standards. D) The flexible-budget amounts are difficult to determine.

B) They are not based on realized benchmarks and can be unrealistic

Which of the following statements is true about activity-based budgeting? A) activity-based budgeting estimates total costs more accurately than cost-based budgeting B) activity-based budgeting provides more detailed information than cost-based budgeting C) activity-based budgeting is cheaper than cost-based budgeting D) activity-based budgeting is simpler to implement than cost-based budgeting

B) activity-based budgeting provides more detailed information than cost-based budgeting

A favorable variance indicates that ________. A) budgeted costs are less than actual costs B) actual revenues exceed budgeted revenues C) actual operating income is less than the budgeted amount D) budgeted contribution margin is more than the actual amount

B) actual revenues exceed budgeted revenues

An efficiency variance reflects the difference between ________. A) actual input quantities used last period and current period B) an actual input quantity and a budgeted input quantity C) an actual input quantity used in a company and its main competitors D) a standard input quantity in a company and its main competitors

B) an actual input quantity and a budgeted input quantity

Management by exception is a practice whereby managers focus more closely on ________. A) variances in the larger departments B) areas not operating as anticipated and less closely on areas that are operating as anticipated C) activity-based budgeting D) unfavorable variances

B) areas not operating as anticipated and less closely on areas that are operating as anticipated

A master budget is ________. A) a budget which starts from a zero base B) based on the level of expected output at the start of the budget period C) developed at the end of a period D) a type of flexible budget once actual results are known

B) based on the level of expected output at the start of the budget period

An unfavorable sales-volume variance could result from ________. A) an inappropriate assignment of labor or machines to specific jobs B) competitors taking market share C) an inefficiency of a purchasing manager in bargaining with suppliers D) a decrease in actual selling price compared to anticipated selling price

B) competitors taking market share

Which of the following is required to arrive at the budgeted units to be produced in a year? A) estimated direct materials inventory required at the end of the year B) estimated finished goods inventory required at the end of the year C) amount of direct materials to be used during the year D) amount of manufacturing overhead to be incurred

B) estimated finished goods inventory required at the end of the year

Financing decisions primarily deal with ________. A) the use of scarce resources B) how to obtain funds to acquire resources C) acquiring equipment and buildings D) preparing financial statements for stockholders

B) how to obtain funds to acquire resources

The sales forecast should be primarily based on ________. A) statistical analysis B) input from sales managers and sales representatives C) production capacity D) input from the board of directors

B) input from sales managers and sales representatives

A flexible budget ________. A) is another name for management by exception B) is developed at the end of the period C) is based on the budgeted level of output D) provides favorable operating results

B) is developed at the end of the period

One of the benefits of a well implemented and executed budget is communication. Which of the following best describes communication within the budgetary cycle? A) meshing and balancing of all aspects of production or service B) making each manager aware of the plan and allowing each manager to understand the importance of the plan C) allocation of scarce resources across all functional areas of the company D) the calculation of deviations from plan

B) making each manager aware of the plan and allowing each manager to understand the importance of the plan

Which variance is calculated by using the formula: (AP - BP) AQ is the ________. A) efficiency variance B) price variance C) total flexible-budget variance D) material spending variance

B) price variance

To prepare the direct materials labor costs budget, which of the following budget must be prepared first? A) direct material purchase budget B) production budget C) direct material usage budget D) budgeted manufacturing overhead

B) production budget

The sales-volume variance is sometimes due to ________. A) the difference between selling price and budgeted selling price B) quality problems leading to customer dissatisfaction C) unexpected increase in manufacturing labor time D) unexpected increase in the use of quantities of inputs of raw material

B) quality problems leading to customer dissatisfaction

The preparation of all the budgets in the master budget forces managers to think about their business operations and to formulate plans, while: A) detecting inaccurate historical records to avoid errors in budgets B) setting expectations against which actual results can be compared C) completing the budgeting tasks with minimal cross functional feedback D) ignoring financial risks and opportunities

B) setting expectations against which actual results can be compared

Activity-based-costing analysis makes no distinction between ________. A) direct-materials inventory and work-in-process inventory B) short-run variable costs and short-run fixed costs C) parts of the supply chain D) components of the value chain

B) short-run variable costs and short-run fixed costs

Which of the following items will be same for a flexible budget and a master budget? A) total variable cost B) total expected fixed costs C) total contribution margin D) total expected revenues

B) total expected fixed costs

Cost variances should be investigated ________. A) when they are considered within the "in-control" range as determined by management B) when the variance is more than a certain percentage of budgeted costs, as determined by management C) even though the cost of investigation exceeds the benefit as determined by management D) when the variance is less than a certain percentage of budgeted costs, as determined by management

B) when the variance is more than a certain percentage of budgeted costs, as determined by management

A favorable efficiency variance for direct materials might indicate that ________. A) lower-quality materials were purchased B) work is scheduled efficiently C) there is an unexpected increase in direct labor rates D) management hired underskilled workers

B) work is scheduled efficiently

An unfavorable efficiency variance for direct manufacturing labor might indicate that ________. A) there is unexpected increase in direct labor rates B) work is scheduled inefficiently C) lower-quality materials were purchased D) more higher-skilled workers were scheduled than planned

B) work is scheduled inefficiently

Which of the following is the correct formula for the materials price variance? A) (Actual price of input - Budgeted price of input) x Budgeted quantity of input B) (Actual quantity of input used - Budgeted quantity of input allowed for actual output) x Budgeted price of input C) (Actual price of input - Budgeted price of input) x Actual quantity of input D) (Actual quantity of input used - Budgeted quantity of input allowed for actual output) x Actual price

C) (Actual price of input - Budgeted price of input) x Actual quantity of input

Which of the following is the correct formula for the materials price variance? A) (Actual price of input - Budgeted price of input) x Budgeted quantity of input B) (Actual quantity of input used - Budgeted quantity of input allowed for actual output) x Budgeted price of input C) (Actual price of input - Budgeted price of input) x Actual quantity of input D) (Actual quantity of input used - Budgeted quantity of input allowed for actual output) x Actual price of input

C) (Actual price of input - Budgeted price of input) x Actual quantity of input

Which of the following is a limitation of using past performance as a basis for judging actual results? A) It does not account for productivity increases over the periods. B) It increases the incentive for managers to introduce budgetary slack. C) It assumes inefficiencies of previous periods without considering possible efficiencies of the budget period. D) It increases the tendency of senior managers exaggerating changes in future conditions as opposed to changes in current conditions.

C) It assumes inefficiencies of previous periods without considering possible efficiencies of the budget period.

Which of the following statements is true about analyzing a single variance? A) It should be overemphasized to take proper decision. B) It should be evaluated in isolation from other variances. C) It can lead to different other variances. D) It should be used for quality evaluation.

C) It can lead to different other variances.

Which of the following is true of budgets when they are administered thoughtfully? A) They eliminate subjectivity in performance evaluation. B) They can eliminate the uncertainty faced by a company. C) They promote coordination within the subunits of a company. D) They are a substitute the planning and coordination functions of management.

C) They promote coordination within the subunits of a company.

Financial planning models: A) are primarily used to evaluate the differences between actual and planned volume B) are not part of sensitivity analysis C) are mathematical representations of the relationships among factors such as operating and financing activities that affect the budget D) allow for analysis of changes in predicted data but not the other underlying assumptions of the budget

C) are mathematical representations of the relationships among factors such as operating and financing activities that affect the budget

Managers who feel that top management does not believe in the budget are most likely to ________. A) pick up the slack and participate in the budgeting process B) to face little interference in the day-to-day aspects of running the business C) be less engaged participants in the budgeting process and less committed to achieving budgeted targets D) convert the budget to a shorter more reasonable time period that will help with real time reporting

C) be less engaged participants in the budgeting process and less committed to achieving budgeted targets

Budgeted production equals ________. A) beginning finished goods inventory + budgeted unit sales - targeted ending finished goods inventory B) targeted ending finished goods inventory + beginning finished goods inventory - budgeted unit sales C) budgeted unit sales + targeted ending finished goods inventory - beginning finished goods inventory D) budgeted unit sales + targeted ending finished goods inventory + beginning finished goods inventory

C) budgeted unit sales + targeted ending finished goods inventory - beginning finished goods inventory

Activity-based budgeting makes it easier to ________. A) determine a rolling budget B) prepare pro forma financial statements C) determine how to reduce costs D) execute a financial budget

C) determine how to reduce costs

The degree to which a predetermined objective or target is met is known as ________. A) efficiency B) variance C) effectiveness D) marking

C) effectiveness

Which of the following information is required by a company's manager while preparing a manufacturing overhead costs budget? A) estimated incentives to be paid to marketing personnel B) estimated expense for office supplies C) estimated expense for maintenance of factory building D) rent expense for lease of office building

C) estimated expense for maintenance of factory building

In a flexible budget ________. A) variable costs are calculated proportionately for the budgeted level of sales B) fixed costs are calculated proportionately for the actual level of sales C) fixed costs are kept at the same level of static budget D) variable costs are kept at the same level of static budget

C) fixed costs are kept at the same level of static budget

Activity-based budgeting ________. A) uses one cost driver such as direct labor-hours B) uses only output-based cost drivers such as units sold C) focuses on activities necessary to produce and sell products and services D) classifies costs by functional area within the value chain

C) focuses on activities necessary to produce and sell products and services

A favorable efficiency variance for direct manufacturing labor indicates that ________. A) a lower wage rate than planned was paid for direct labor B) a higher wage rate than planned was paid for direct labor C) less direct manufacturing labor-hours were used during production than planned for actual output D) more direct manufacturing labor-hours were used during production than planned for actual output

C) less direct manufacturing labor-hours were used during production than planned for actual output

The emphasis on variance analysis and its use in performance evaluation must be such that: A) managers focus on setting easy to attain targets B) larger unfavorable variances should result in negative consequences for personnel held accountable C) management should set targets that challenge but are reasonably achievable and require creativity and resourcefulness by personnel held accountable D) Management should stretch resources to meet goals even if continuous improvement and quality suffers

C) management should set targets that challenge but are reasonably achievable and require creativity and resourcefulness by personnel held accountable

Which one of the following budgets would be prepared using activity based budgeting techniques? A) direct materials purchase budget B) revenues budget C) manufacturing overhead cost budget D) production budget

C) manufacturing overhead cost budget

The flexible-budget variance for direct cost inputs can be further subdivided into a ________. A) static-budget variance and a sales-volume variance B) sales-volume variance and an efficiency variance C) price variance and an efficiency variance D) static-budget variance and a price variance

C) price variance and an efficiency variance

The major objectives of a budgeting process should include all of the following EXCEPT: A) providing coordination among the subunits B) providing communication among the subunits C) providing unyielding commitment to targets as a means to achieve a target profit D) providing a framework for judging performance and facilitating learning

C) providing unyielding commitment to targets as a means to achieve a target profit

Financial planning software packages assist management with ________. A) assigning responsibility to various levels of management B) identifying the target customer C) sensitivity analysis in their planning and budgeting activities D) achieving greater commitment from lower management

C) sensitivity analysis in their planning and budgeting activities

An unfavorable variance indicates that ________. A) the actual costs are less than the budgeted costs B) the actual revenues exceed the budgeted revenues C) the actual units sold are less than the budgeted units D) the budgeted contribution margin is more than the actual amount

C) the actual units sold are less than the budgeted units

Activity-based budgeting would separately estimate ________. A) the cost of overhead for a department B) a plant-wide cost-driver rate C) the cost of a setup activity D) All of these answers are correct.

C) the cost of a setup activity

A variance is ________. A) the difference between actual fixed cost per unit and standard variable cost per unit B) the standard units of inputs for one output C) the difference between an actual result and a budgeted performance D) the difference between actual variable cost per unit and standard fixed cost per unit

C) the difference between an actual result and a budgeted performance

The revenues budget reveals A) expected cash flows for each product B) actual unit sales from last year multiplied by the budget period's expected selling prices for each product C) the expected level of unit sales multiplied by expected unit selling prices for company products D) the variance of sales from actual for each product

C) the expected level of unit sales multiplied by expected unit selling prices for company products

The budgeting process is most strongly influenced by ________. A) the capital budget B) the budgeted statement of cash flows C) the sales forecast D) the production budget

C) the sales forecast

These questions refer to flexible-budget variance formulas with the following descriptions for the variables: A = Actual; B = Budgeted; P = Price; Q = Quantity. The best label for the formula [(AP)(AQ) - (BP)(BQ)] is the ________. A) efficiency variance. B) price variance C) total flexible-budget variance D) spending variance

C) total flexible-budget variance

A favorable price variance for direct manufacturing labor might indicate that ________. A) employees were paid more than planned B) unexpected increase in direct labor rates C) underskilled employees are being hired D) congestion due to scheduling problems

C) underskilled employees are being hired

A flexible-budget variance is $600 favorable for unit-related costs. This indicates that costs were ________. A) $600 more than the master budget B) $600 less than for the planned level of activity C) $600 more than standard for the achieved level of activity D) $600 less than standard for the achieved level of activity

D) $600 less than standard for the achieved level of activity

Which of the following is true of a budget? A) Budgets are used to express only the operational plans and not the strategic plans of a company. B) Budgets do not account for nonfinancial aspects of the upcoming period. C) Budgets are most useful when they are planned independent of the company's strategic plans. D) Budgets help managers to revise their plans and strategies.

D) Budgets help managers to revise their plans and strategies.

Which of the following best describes a bill of materials? A) It is a document that is prepared by a vendor to invoice a manufacturer for a purchase of materials B) It is a document that is used to order materials C) It is a document that requests materials be removed from the warehouse and put into production D) It is a document that identifies how each product is manufactured, specifying materials and components and the quantities of materials in each finished good

D) It is a document that identifies how each product is manufactured, specifying materials and components and the quantities of materials in each finished good

If management experiences an unfavorable direct materials efficiency variance, which of the following would not be the possible corrective action? A) Improve the design of the product B) Provide additional training for the direct laborers C) Purchase higher quality materials D) Negotiate lower prices for material acquisition

D) Negotiate lower prices for material acquisition

Which of the following is the most frequently used budget periods used in business? A) a basic budget period of 1 year often subdivided into semi-annual periods B) a basic budget period of 2 years often subdivided into quarters and semi-annual periods C) A basic budget period of 2 years subdivided into monthly periods D) a basic budget period of 1 year often subdivided into quarters and months

D) a basic budget period of 1 year often subdivided into quarters and months

The operating budget process generally concludes with the preparation of the ________. A) production budget B) cash flow statement C) balance sheet D) budgeted income statement

D) budgeted income statement

The ________ is a component of financial budgets. A) cost of goods sold budget B) budgeted income statement C) direct materials budget D) budgeted statement of cash flows

D) budgeted statement of cash flows

Budgets incorporate managements goals and A) are a strategic long range plan B) are both a short range and long range profit plan C) includes only financial aspects of an operation as those are the only items that can be quantified in a profit plan D) express management's operating and financial plan for a specified period - usually a fiscal year

D) express management's operating and financial plan for a specified period - usually a fiscal year

Which of the following is referred to as the bottom-up aspect of the budgeting process? A) lower-level managers setting their individual targets that aggregate to be the company-wide target B) senior managers consulting middle- and lower-level managers to investigate any deviations from the budget C) lower-level managers implementing the budgets with senior managers monitoring progress and investigating deviations D) lower-level managers providing inputs to the budgeting process based on their specialized knowledge and familiarity of the operation

D) lower-level managers providing inputs to the budgeting process based on their specialized knowledge and familiarity of the operation

Costs such as supervision, plant and equipment (production) depreciation, maintenance, supplies, and power. are included in the ________. A) capital expenditures budget B) distribution costs budget C) revenues budget D) manufacturing overhead budget

D) manufacturing overhead budget

The practice of developing reasonably challenging budgets tend to help: A) discourage out-of-the-box and creative thinking as there is very little room for error B) set unrealistic expectations and are perceived as overly ambitious and unachievable C) increase anxiety without motivation not meeting them is viewed as a failure D) motivate improved performance as employees work more intensely to avoid failure

D) motivate improved performance as employees work more intensely to avoid failure

Which of the following is most likely to be a cost driver for the variable portion of marketing costs? A) percentage of markup on cost B) number of units produced C) increase in revenues attributable to such marketing D) number of units units sold

D) number of units units sold

A purchasing manager's performance is best evaluated using information such as A) usage efficiency and direct materials price variance B) direct materials flexible-budget variance C) direct manufacturing labor flexible-budget variance D) price and terms bargaining effectiveness, achievement of quality goals, and direct materials price

D) price and terms bargaining effectiveness, achievement of quality goals, and direct materials price

A budget is an end product of negotiations among senior and subordinate mangers because ________. A) budgeting is their mutual responsibility B) senior managers alone cannot spare the time required for the budgeting process C) senior managers are responsible for providing information on competitors performance and subordinate managers are responsible for information on external market conditions D) senior managers want very challenging targets, while subordinates may want targets that are relatively easier to achieve.

D) senior managers want very challenging targets, while subordinates may want targets that are relatively easier to achieve.

Efficiency is ________. A) the degree to which a predetermined objective or target is met B) the difference between an actual input quantity and a budgeted input quantity C) the continuous process of comparing a firm's performance levels against the best levels of performance in competing companies D) the relative amount of inputs used to achieve a given output level

D) the relative amount of inputs used to achieve a given output level

When performing a sensitivity analysis, if the selling price per unit is increased, then the ________. A) per unit fixed administrative costs will increase B) per unit direct materials purchase price will increase C) total volume of sales will increase D) total costs for sales commissions and other nonmanufacturing variable costs will increase

D) total costs for sales commissions and other nonmanufacturing variable costs will increase