Theory Questions Flashcards
A manager, who is responsible for costs where the relationship between costs and outputs isn’t easy to specify, is given a budget for total costs with instructions not to exceed it; For which kind of a responsibility center is this typical?
For discretionary cost centers.
Wanneer ervaar je autonome motivatie op je werk? (deze vraag heeft betrekking op het gastcollege over Management Control)
Wanneer je in je werk keuzevrijheid en leuke contacten hebt en kunt doen waar je goed in bent.
Which of the following is an advantage of participative budgeting?
Employees are more motivated because they are more involved in the process.
A scarcity of raw materials makes it difficult to estimate the availability of materials for production. What is in this situation the most reasonable forecast with which to start the master budget for a manufacturing company?
A forecast of purchasing and production
What is an advantage of using multiple measures of performance, instead of a single measure of performance?
This gives a better control by middle or top management.
A balanced scorecard shows measures of performance as they relate to areas of performanc. Which of the following is a measure of performance of the internal business process?
Process cycle time.
Which of the following points does not relate to designing a new cost system for managerial purposes?
Only the most accurate method should be considered.
When a company has a manufacturing plant producing many different products with highly skilled and experienced employees, what is probably the most appropriate basis of applying overhead costs to products?
Direct labor costs.
In computing its predetermined overhead rate which is based on total direct costs, Red Company unintentionally left its direct labor costs out of the computation. Before allocating over- or underapplied Overhead, this mistake will cause:
the ending balance in Work-in-Process to be overstated.
Which of the following organizations would most likely use a job costing system?
Custom-made yacht builder.
Of the following process costing steps, which must be done last?
Assign product costs to batches of work.
When using process costing, the FIFO method provides an advantage over the weighted-average method in that:
the FIFO method provides measurements of work done during the current period.
Which of the following is a weakness of the direct method of service department cost allocations?
All interdepartmental services (between service departments) are ignored.
A favorable materials price variance coupled with an unfavorable materials usage variance would most likely result from:
the purchase of lower-than-standard-quality materials.
What is the purpose of the flexible budget?
To compare actual and budgeted results at virtually any level of production.
Which kind of organization unit is established when managers are held responsible for costs but the input-output relationship is not well specified?
discretionary cost center
What is the main purpose of a Management Control System:
aligning operational execution with company strategy.
Which of the following statements concerning budgeting is true?
Many organizations start with a sales forecast and then plan the activities over which they have more control.
