Managerial Accounting Exam 2
Which of the following is not an operated budget?
Cash budgets
Which of the following is true in a bottom-up budgeting approach?
Departments determine their needs and relate them to the overall goals.
Which of the following statements is not correct?
The direct materials budget begins with the sales estimated for each period.
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 difference between which of the following?
actual and standard overhead rates
The fixed factory overhead variance is caused by the difference between which of the following?
actual fixed overhead and applied fixed overhead
The units required in production each period are computed by which of the following methods?
adding budgeted sales to the beginning inventory and subtracting the desired ending inventory.
Internal costs that are charged to the segments of a business are called ________.
allocated costs
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
Which of the following is not a common goal of an organization?
being acquired by another business
Which approach is most likely result in employee buy in to the budget?
bottom-up approach
Which of the following is a finance budget?
cash budget
Which of the following includes only financial budgets?
cash budget, budgeted balance sheet, capital asset budget
Which of the following is not a type of responsibility center?
concentrated cost center
xCosts that a company or manager can influence are called
controllable costs
This variance is the difference involving spending less, or using less than the standard amount
favorable variance
The cash budget is part of which category of budgets?
financial budgets
Which budget evaluates the results of operations at the 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
Which of the following is a possible cause of an unfavorable labor efficiency variance?
hiring substandard workers
An example of an uncontrollable cost would include all of the following except ________.
hourly rate of pat for the companies 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
What are some possible reasons for a direct labor time variance?
less qualified workers
A transfer pricing arrangement that uses the price that would be charged to an external customer is a ________.
market-based approach
What are some reasons for a material quantity variance
more qualified workers
Segments are uniquely identifiabl
number of employees
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
Which of the following is a possible cause of an unfavorable material price variance?
purchasing higher quality material
Which of the following is a possible cause of an unfavorable material quantity variance?
purchasing standard material
A key advantage of a decentralized organization is ________.
quicker decisions and response times
A responsibility center structure that considers investments made by the operating segments by using a common cost of capital percentage is called ________.
residual income
A system that establishes financial accountability for operating segments within an organization is called ________.
responsibility accounting
Which budget is the starting point in preparing financial budgets?
sales budget
Which of the operating budgets is prepared first?
sales budget
9.3An important goal of a responsibility accounting framework is to help ensure which of the following?
segment and company financial goals are congruent
organizational charts _
show the structure of an organization
What are some possible reasons for a material price variance
substandard material
Managers in decentralized organiza
the companys stock price
A transfer pricing structure that considers the opportunity costs of selling to internal rather than external customers uses ________.
the opportunity cost approach
Why does a company use a standard costing system?
to identify variances from actual cost that assist them in maintaining profits
This variance is the difference involving spending more or usin
unfavorable variance
When is the labor rate variance favorable?
when the actual price is less than the standard price
When is the material price variance favorable
when the actual price is less than the standard price
When is the labor rate variance unfavorable?
when the actual price paid is greater than the standard price
When is the material price variance unfavorable?
when the actual price paid is greater than the standard price
When is the direct labor time variance unfavorable?
when the actual quantity used is greater than the standard quality
When is the material quantity unfavorable?
when the actual quantity used is greater than the standard quantity
When is the direct labor time variance favorable?
when the actual quantity used is less than the standard quantity
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
