FINAL ACCT - CHP 15

which of the following is a charateristic that is needed for decentralization to work well in a org? a. responsibility b. good communication c. clear lines of authority d. all of the above

all of the above

the kind of responsibility center that would be evaluated by comparing income on assets to the amount of assets invested is a. asset center b. investment center c. cost center d. profit center

b. investment center

when contribution margin would be the most important variable in evaluating the performance of a. an investment center b. profit center c. production center d. a cost center

b. profit center

which of the following is a difference between a static and a flexible budget? a. static budget are based on the same per unit variable amount, whereas flexible budgets are based on multiple per unit variable amounts b. static budgets are based on single estimate of volume, whereas flexible budgets show estimated costs and revenues at a variety of activity

b. static budgets are based on single estimate of volume, whereas flexible budgets show estimated costs and revenues at a variety of activity

static and flexible budgets are similar in that a. they both are prepared for multiple activity levels b. they both are based on the same per unit variable amounts and the same fixed costs c. they both concentrate solely on costs

b. they both are based on the same per unit variable amounts and the same fixed costs

when would a sales variance be listed as favorable? a. when actual sales are less than budgeted or expected sales b. when actual sales exceed budgeted or expected sales c. when actual sales are equal to budgeted or expected sales

b. when actual sales exceed budgeted or expected sales

select the incorrect statement regarding flexible budgets a. standard prices and costs are used in preparing a flexible budget b. a flexible budget is used to compare actual to budgeted amounts c. a flexible budget is also known as a master budget d. flexible budgets often show estimated revenues and costs at multiple volume levels

c. a flexible budget is also known as a master budget

the practice of delegating authority and responsibility is referred to as a. centralization b. management exception c. decentralization d. standard costing

c. decentralization

which of the following would increase residual income? assume all other things are equal a. decrease in operating income b. increase in the desired return on investment c. decrease in investment d. none of these

c. decrease in investment

a reporting unit of decentralized business that controls identifiable revenue and/or expense items is known as a. management center b. performance center c. resp center d. accounting center

c. resp center

when would a variance be labeled as favorable a. when standard costs are less than actual costs b. when estimated costs are greater than actual costs c. when actual costs are less than standard costs d. when standard costs are equal to actual costs

c. when actual costs are less than standard costs

when would a cost variance be listed as unfavorable a. when actual costs are less than budgeted costs b. when actual costs are equal to budgeted costs c. when actual costs exceed budgeted costs

c. when actual costs exceed budgeted costs

vanessa grant is responsible for controlling expenses, but is not rsponsible for generating revenues. vanessa is a manager of a. profit center b. cost center c. investment center d. liability center

cost center

which of the following statements regarding cost centers are incorrect a. cost centers tend to be found at upper lebels on a companys org chart. b cost center managers are evaluated on their ability to control costs and keep withing budget c. cost center are unit within a business that incur expense, but do not have responsibility for generating revenue

cost center tend to be found at upper levels

the research and development dept of apple computers would likely be organized as a. revenue center b. investment center c. profit center d. a cost center

d. a cost center

which of the followings reaosons cause flexible budgets to be useful planning tools? a. flexible budgets can help managers judge if materials and storage facilitates are appropriate for various production levels b. flexible budgets allow managers to anticipate results under a variety of scenarios d. all of these answers are correct

d. all of these answers are correct

which of the following statements regarding balanced scorecard is correct a. a balanced scorecard includes several different performance measures that can be used to assess how well a business is accomplished their mission c. a balanced scorecard includes financial performance measures such as ROI d. all of these are correct answers

d. all of these are correct answers

delegating authroity and resp throughout an org is known as a. centralization b. sub optimization c. management by exception d. decentralization

d. decentralization

which of the following is not typically found in a decentralized organization a. profit center b. investment center c. cost center d. decision making

d. decision making

the process of evaluating the performance of individual managers is known as a. responsibility management b. management by exception c. performance management d. resp. management

d. resp. management

which of the following applications is most suited for developing flexible budgets a. word processing b. graphics c. database d. spreadsheet

d. spreadsheet

organizational unit of business that incurs costs and generates revenues is known as a. investment center b. cost center c. profit center d. sales center

profit center

select the correct statements regarding flexible budgets a. a flexible budget shows expected revenues and costs are variety of activity levels b. flexible budget can only be prepared for a single level of activity c. a flexible budget is not used for planning

a. a flexible budget shows expected revenues and costs are variety of activity levels

which of the following statements regarding profit centers is correct a. a manager of a profit center is evaluated only on his/her ability to control costs and generates revenues b. manager of a profit center is evaluated on his her ability to control costs c. manager pof a profit center is responsible for assets, liabilities, and earnings

a. a manager of a profit center is evaluated only on his/her ability to control costs and generates revenues

packrall company makes computer chips. curtis is manager of the companys maintence dept. because his maintenance technicians are so well trained in maintaining expensive and sensitive circuit board stamping equipment. curtis has been authorized to contract to perform maintence for outside customers. in this company, the maintenance dept is likely org as a. a profit center b. cost center c. investment center d. revenue center

a. a profit center

all of the following ar characteristic that are required for effective responsbility accounting except a. centralization b motivation c. accountability

a. centralization

select the incorrect statement concerning the application of the controllability concept to responsibility accounting a. each manager should be evaluated on the costs but not the revenues that are under his or her control b. managers lose motivation when they are held accountable for actions that are beyond their scope of control c. the concept of control is crucial to an effective responsibility accounting system d. as a practical matter, control cost or rvenues may be shared rather than absolute

a. each manager should be evaluated on the costs but not the revenues that are under his or her control

which of the following statements about residual income true? a. residual income is the amount in excess of a target or desired return on investment b. residual income = operating - sales c. residual = operating income - operating assets

a. residual income is the amount in excess of a target or desired return on investment

a budget prepared at a single volume of activyt is referred to as a. static budget b. standard budget c. strategic budget d. flexible budget

a. static budget

when would a sales price variance be listed as unfavorable a. when the actual sales price is less than the standard sales price b. when the actual sales volume is less than the budgeted sales volume c. when the actual sales price is greater than the standard sales price d. when the actual sales price is equal to the standard sales price

a. when the actual sales price is less than the standard sales price