Exam 16: Managing Costs and Uncertainty

Assume actual output exceeds the level of output in the original budget.You would expect costs in which of the following categories to exceed the original budget?

Davis Corporation Davis Corporation manufactures and sells baseball bats.For a recent period,its production and sales objectives were each set at 20,000 units.Also,for this period the firm had estimated costs as follows: Refer to Davis Corporation.For this question only,assume Davis Corporation actually produced and sold 19,000 baseball bats.At this level of operation,Davis Corporation's total costs were $170,000.Evaluate Davis Corporation's success in terms of effectiveness and efficiency.

Clarkson Company The following information is provided for Clarkson Company for the month of September: Refer to Clarkson Company.What is the price variance?

What are the differences between committed fixed costs and discretionary fixed costs?

What are four generic strategies that may be used in cost management to deal with uncertainty?

Which of the following strategies is used to deal with uncertainty related to estimating future costs?

The use of options and forward contracts to manage price risk is referred to as ___________________.

Which of the following is not a factor that directly affects the budget for a discretionary cost?

Having sufficient cash to pay liabilities as they become due is referred to as an organization's ________________________.

Clarkson Company The following information is provided for Clarkson Company for the month of September: Refer to Clarkson Company.What is the fixed spending variance?

What factors make discretionary costs difficult to control?

Acme Corporation has a sales goal of $500,000 for the coming year.Based on this level of activity,Acme budgets its total expenses at $450,000.Actual sales are $480,000 and actual costs are $460,000.Acme Corporation's operations were

If a discretionary cost can be treated like an engineered cost,cost control may be achieved through the use of

A variance represents the difference between a budgeted and an actual cost.Thus,the variance measures

An effective control system functions before,during,and after an event.However,little control is possible during the event for most

How does strategic staffing fit in with departmental staffing?

A coefficient of determination has a value between -1 and +1.

What are the two main sources of uncertainty in cost management?

Increases in per unit variable costs and total fixed costs should be minimized through the process of ________________________________.

Usually,with respect to a variable cost,optimal control is exerted when the cost