Accounting 404 Exam 3
production budget
Which of the following is an operating budget?
sales budget
budget prepared first
finance budgets
which budget category does the cash budget fall?
predicts estimated revenues and costs at varying levels of production
A flexible budget
profit center
A responsibility center in which managers are held accountable for both revenues and expenses is called a
responsibility accounting
A system that establishes financial accountability for operating segments within an organization is called
hourly rate of pay for the company's purchasing manager
An example of an uncontrollable cost would include all of the following except
controllable costs
Costs that a company or manager can influence are called
at the highest level of the organization and promoted downward
In a centralized organization, where are goals established?
the company's stock price
Managers in decentralized organizations make decisions relating to all of the following except
show the structure of an organization
Organizational charts
number of employees
Segments are uniquely identifiable components of the business and can be categorized by all of the following except
production budget
The direct materials budget is prepared using which budget's information?
adding budgeted sales to the desired ending inventory and subtracting beginning inventory
The units required in production each period are computed by which of the following methods?
actual and standard allocation base
The variable overhead efficiency variance is caused by the difference between which of the following?
actual and standard overhead rates
The variable overhead rate variance is caused by the sum between which of the following?
attainable standard
This standard is set at a level that may be reached with reasonable effort
favorable variance
This variance is the difference involving spending less, or using less than the standard amount
unfavorable variance
This variance is the difference involving spending more or using more than the standard amount.
hiring of less qualified workers
What are some possible reasons for a labor rate variance?
substandard material
What are some possible reasons for a material price variance?
The fixed manufacturing overhead is adjusted for units sold in the flexible budget
What is the main difference between static and flexible budgets?
The variable costs are adjusted in a flexible budget.
What is the main difference between static and flexible budgets?
when the actual price is less than the standard price
When is the material price variance favorable?
when the actual price paid is greater than the standard price
When is the material price variance unfavorable?
bottom-up approach
Which approach is most likely to result in employee buy-in to the budget?
zero-based budgeting
Which approach requires management to justify all its expenditures?
a system that only measures profitability
Which of the following does not describe a management control system?
cash budget, budgeted balance sheet, capital asset budget
Which of the following includes only financial budgets?
cash budget
Which of the following is a finance budget?
hiring substandard workers
Which of the following is a possible cause of an unfavorable labor efficiency variance?
hiring higher-quality workers at a higher wage
Which of the following is a possible cause of an unfavorable labor rate variance?
preventing net operating losses
Which of the following is not a part of budgeting
concentrated cost center
Which of the following is not a type of responsibility center?
cash budget
Which of the following is not an operating budget?
Departments determine their needs and relate them to the overall goals
Which of the following is true in a bottom-up budgeting approach?
The direct materials budget begins with the sales estimated for each period
Which of the following statements is not correct?
The direct materials budget begins with the sales estimated for each period.
Which of the following statements is not correct?
to identify variances from actual cost that assist them in maintaining profits
Why does a company use a standard costing system?
finance budget
cash budget is part of which category of budgets?
at the highest level
in a centralized organization, where are the goals established?
allocated costs
internal costs that are charged to a segment of a business called
false
key advantage of a decentralized organization is the ease of aligning segment and company goals
annual
most common time period for which a budget is prepared
Zero-based budgeting
type of budgeting requires management to justify all its expenditures
variable costs
variable costs are adjusted in a flexible budget
general transfer pricing approach
what transfer pricing structure considers to the opportunity costs of selling to internal rather than external customers?
flexible budget
which budget evaluates the results of operations at the actual level of activity
production budget
which is prepared first, the direct materials budget, production budget, or the direct labor budget?
most common budget is prepared for a
year
