chapter 8

Question 1

what centres receive responsibility reports containing budgeted and actual controllable revenues and costs

Answer 1

profit centers

Question 2

What exists when budgeted costs exceed actual results?

Answer 2

favorable difference

Question 3

how can a manager of a investment center improve ROI

Answer 3

decreasign average operating assests

Question 4

what shows planned results at the original budgeted activity level

Answer 4

static / standard budget

Question 5

A manager determined that certain costs were NOT responsive to changes in activity level. What are these costs

Answer 5

fixed

Question 6

what is usually a production or service department

Answer 6

cost centre

Question 7

What effects do increases in plant assets have on ROI?

Answer 7

decreases the ROI

Question 8

how to find the flexible budget on manufacturing costs

Answer 8

get all the variable costs then divide that by the work hours and then multiply the new hours by that and add all the fixed costs.

Question 9

Kilroy Manufacturing prepared a 2016 budget for 40,000 units of product. Actual production in 2016 was 41,000 units. Which one of the following is the most useful comparison for this company

Answer 9

the actual results for 41,000 units with a new budget for 41,000 units

Question 10

When is a static budget most appropriate in evaluating a manager’s performance?

Answer 10

when the company performed at the same activity level as the static budget level