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acct > exam 3 > Flashcards

exam 3 Flashcards

1
Q

Managers may intentionally build slack into the budget

A

to gain the resources they need in the event of budget cuts

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2
Q

all of the following budgets are prepared by merchandising companies EXCEPT

A

direct materials

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3
Q

most companies use _____ when the lower level management developed budgets each year

A

participative budgeting

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4
Q

which of the following budgets is the cornerstone of the master budget?

A

sales

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5
Q

“capital expenditures budget” is best described by which of the following concepts?

A

a company’s plan to purchase property, plant, and equipment, and other long-term assets

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6
Q

in which of the following company types does a manager use an operating expenses budget?

A

manufacturing, merchandise, and service

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7
Q

which of the following is a benefit to an organization that implements a budget

A

incentive, goals, motivation
plan, directs, control

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8
Q

in which of the following company types does a manger use a sales budget

A

merchandise
manufacturers
service

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9
Q

which of the following budgets project cash inflows, cash outflows, and the budgeted balance sheet?

A

Financial budget

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10
Q

financial budget” is best described as which of the following?

A

a budget that projects cash inflows, cash outflows, and the end of period budgeted balance

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11
Q

the performance evaluation of a profit center is typically based on its

A

segment margin

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12
Q

which of the following alternatives reflects the proper order of preparing components of the comprehensive budget?

A

Sales budget
Production budget
Direct Materials Budget

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13
Q

In a budgeted income statement, we calculate the cost of good sold by multiplying the ________ of unit sales and the ______ cost per unit

A

number, manufacturing (COGS)

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14
Q

in preparing the operating budget, the first step is preparing the -

A

sales budget

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15
Q

which of the following items is a component of a cash payments budget? 

A

Cash Dividends

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16
Q

“ combined cash budget” is best defined by which of the following?

A

Details about how the company expects to move out of the beginning, cash, balance, and into the desired ending cash balance

17
Q

in which of the following company type does a managers use a sales budget?

A

Manufacturing, merchandising, service

18
Q

in which of the following company types does a manager use a capital expenditures budget

A

Service, merchandising, manufacturing

19
Q

All the following are responsibility centers, except

A

Equity Center

20
Q

Decentralization allows, top managers to hire workers with expert knowledge in each business unit

A

true

21
Q

A performance report compares actual revenue in expenses with ______ revenues, and expenses

A

budgeted

22
Q

The difference between actual results and budget results is known as decentralization

A

FALSE

23
Q

The duties of an investment center manager are similar to those of a CEO

A

true

24
Q

total assets is the denominator in the formula managers used to compute ROI

A

true

25
Q

The difference between the actual revenues and expenses and the comprehensive budget is known as

A

comprehensive budget variance

26
Q

with regard to a static budget instead of a flexible budget, which of the following is true

A

a static budget is prepared for only one level of sales activity

27
Q

ideal standards allow for normal amount of waste and inefficiency

A

false

28
Q

They direct materials flexible budget variance can be broken down into a price variance and quantity variance

A

True

29
Q

The direct materials price variance is calculated as

A

the Actual Quantity Purchased (AQP) multiplied by the difference between the Actual Price (AP) and the Standard Price (SP) of the input purchased. AQP(AP-SP)

30
Q

Which variance is directly impacted if the employees build a product go on strike and temporary workers who are slower and not a skilled or hired

A

Direct labor efficiency variance

31
Q

A cost benchmark is valid only if the standards are

A

Kept up-to-date

32
Q

The variable overhead rate variance may be affected by both indirect labor and indirect materials

A

True

33
Q

The fixed overhead volume variance is the result of which of the following causes

A

Viewing variable cost as fixed cost, and incorrectly, estimating activity levels

34
Q

The comprehensive budget is the set of budgeted financial statements and supporting schedules in the entire organization

A

True

35
Q

in a production budget, the units from _______ inventory will be ______ from the total units needed

A

ending, deducted

36
Q

On the direct labor budget, the total quantity of direct labor hours needed is computed as

A

units to be produced x direct labor hour per unit

acct (4 decks)

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