Question 1

A flexible budget is a series of static budgets at different levels of activities.

Accepted Answer

A) True 
 B)False

Question 2

Cost centers, profit centers, and investment centers can all be classified as responsibility centers.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following will cause an increase in ROI?

Accepted Answer

A) An increase in variable costs 
B) An increase in average operating assets 
C) An increase in sales 
D) An increase in controllable fixed costs 
A) An increase in variable costs 
B) An increase in average operating assets 
C) An increase in sales 
D) An increase in controllable fixed costs

Question 4

Grown Industries reported the following items for 2013: $$\begin{array} { l r } 
\text { Income tax expense } & \$ 60,000 \
\text { Contribution margin } & 200,000 \
\text { Controllable fixed costs } & 80,000 \
\text { Interest expense } & 40,000 \
\text { Total operating assets } & 650,000
\end{array}$$ How much is controllable margin?

Accepted Answer

A) $200,000 
B) $120,000 
C) $60,000 
D) $20,000 
A) $200,000 
B) $120,000 
C) $60,000 
D) $20,000

Question 5

Trails and Paths, Inc.had average operating assets of $6,000,000 and sales of $3,000,000 in 2013.If the controllable margin was $600,000, the ROI was

Accepted Answer

A) 50% 
B) 40% 
C) 20% 
D) 10% 
A) 50% 
B) 40% 
C) 20% 
D) 10%

Question 6

Total budgeted fixed costs appearing on a flexible budget will be the same amount as total fixed costs on the master budget.

Accepted Answer

A) True 
 B)False

Question 7

Sydney, Inc.uses flexible budgets.At normal capacity of 16,000 units, budgeted manufacturing overhead is $128,000 variable and $360,000 fixed.If Sydney had actual overhead costs of $500,000 for 18,000 units produced, what is the difference between actual and budgeted costs?

Accepted Answer

A) $4,000 unfavorable 
B) $4,000 favorable 
C) $12,000 unfavorable 
D) $16,000 favorable 
A) $4,000 unfavorable 
B) $4,000 favorable 
C) $12,000 unfavorable 
D) $16,000 favorable

Question 8

Not-for-profit entities

Accepted Answer

A) do not use responsibility accounting. 
B) utilize responsibility accounting in trying to maximize net income. 
C) utilize responsibility accounting in trying to minimize the cost of providing services. 
D) have only noncontrollable costs. 
A) do not use responsibility accounting. 
B) utilize responsibility accounting in trying to maximize net income. 
C) utilize responsibility accounting in trying to minimize the cost of providing services. 
D) have only noncontrollable costs.

Question 9

Le Sud Retailers has a current return on investment of 10% and the company has established an 8% minimum rate of return for the division.The division manager has two investment projects available, for which the following estimates have been made: 
Project A - Annual controllable margin = $24,000, operating assets = $400,000
Project B - Annual controllable margin = $60,000, operating assets = $550,000
Which project should be funded?

Accepted Answer

A) Both projects 
B) Project A 
C) Project B 
D) Neither project 
A) Both projects 
B) Project A 
C) Project B 
D) Neither project

Question 10

A flexible budget is appropriate for $\begin{array}{lll}&\text { Direct Labor Costs }&\text { Manufacturing Overhead Costs }\
\text { a. } & \text { No } & \text { No } \
\text { b. } & \text { Yes } & \text { Yes } \
\text { c. } & \text { Yes } & \text { No } \
\text { d. } & \text { No } & \text { Yes }
\end{array}$

Accepted Answer

The answer of A flexible budget is appropriate for \(\begin{array}{lll}&\text...

Question 11

The activity index used in preparing a flexible budget should not influence the variable costs that are being budgeted.

Accepted Answer

A) True 
 B)False

Question 12

Costs that relate specifically to one center and are incurred for the sole benefit of that center are

Accepted Answer

A) common fixed costs. 
B) direct fixed costs. 
C) indirect fixed costs. 
D) noncontrollable fixed costs. 
A) common fixed costs. 
B) direct fixed costs. 
C) indirect fixed costs. 
D) noncontrollable fixed costs.

Question 13

Best Shingle's budgeted manufacturing costs for 50,000 squares of shingles are: $\begin{array}{ll}
\text {Fixed manufacturing costs  }&\$12,000 \
\text {manufacturing costs }&\text { $ \$ 16.00 $ per square} \
\end{array}$
 Best produced 40,000 squares of shingles during March.How much are budgeted total manufacturing costs in March?

Accepted Answer

A) $640,000 
B) $812,000 
C) $800,000 
D) $652,000 
A) $640,000 
B) $812,000 
C) $800,000 
D) $652,000

Question 14

Which of the following will not result in an unfavorable controllable margin difference?

Accepted Answer

A) Sales exceeding budget; costs under budget 
B) Sales exceeding budget; costs over budget 
C) Sales under budget; costs under budget 
D) Sales under budget; costs over budget 
A) Sales exceeding budget; costs under budget 
B) Sales exceeding budget; costs over budget 
C) Sales under budget; costs under budget 
D) Sales under budget; costs over budget

Question 15

A static budget is one that is geared to one level of activity.

Accepted Answer

A) True 
 B)False

Question 16

Top management can control

Accepted Answer

A) only controllable costs. 
B) only noncontrollable costs. 
C) all costs. 
D) some noncontrollable costs and all controllable costs. 
A) only controllable costs. 
B) only noncontrollable costs. 
C) all costs. 
D) some noncontrollable costs and all controllable costs.

A flexible budget is a series of static budgets at different levels of activities.

Cost centers, profit centers, and investment centers can all be classified as responsibility centers.

Which of the following will cause an increase in ROI?

Grown Industries reported the following items for 2013: Income tax expense \ 60,000 Contribution margin 200,000 Controllable fixed costs 80,000 Interest expense 40,000 Total operating assets 650,000 How much is controllable margin?

Trails and Paths, Inc.had average operating assets of $6,000,000 and sales of $3,000,000 in 2013.If the controllable margin was $600,000, the ROI was

Total budgeted fixed costs appearing on a flexible budget will be the same amount as total fixed costs on the master budget.

Sydney, Inc.uses flexible budgets.At normal capacity of 16,000 units, budgeted manufacturing overhead is $128,000 variable and $360,000 fixed.If Sydney had actual overhead costs of $500,000 for 18,000 units produced, what is the difference between actual and budgeted costs?

Not-for-profit entities

A flexible budget is appropriate for Direct Labor Costs Manufacturing Overhead Costs a. No No b. Yes Yes c. Yes No d. No Yes

The activity index used in preparing a flexible budget should not influence the variable costs that are being budgeted.

Costs that relate specifically to one center and are incurred for the sole benefit of that center are

Best Shingle's budgeted manufacturing costs for 50,000 squares of shingles are: Fixed manufacturing costs \1 2,000 manufacturing costs \ 16.00 per square Best produced 40,000 squares of shingles during March.How much are budgeted total manufacturing costs in March?

Which of the following will not result in an unfavorable controllable margin difference?

A static budget is one that is geared to one level of activity.

Top management can control

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: the Big Picture

Managerial Accounting

Time Value of Money and Present Value Calculations

Filters

Exam 10: Reporting and Analyzing Liabilities

A flexible budget is a series of static budgets at different levels of activities.

Cost centers, profit centers, and investment centers can all be classified as responsibility centers.

Which of the following will cause an increase in ROI?

Grown Industries reported the following items for 2013: Income tax expense \ 60,000 Contribution margin 200,000 Controllable fixed costs 80,000 Interest expense 40,000 Total operating assets 650,000 How much is controllable margin?

Trails and Paths, Inc.had average operating assets of $6,000,000 and sales of $3,000,000 in 2013.If the controllable margin was $600,000, the ROI was

Total budgeted fixed costs appearing on a flexible budget will be the same amount as total fixed costs on the master budget.

Sydney, Inc.uses flexible budgets.At normal capacity of 16,000 units, budgeted manufacturing overhead is $128,000 variable and $360,000 fixed.If Sydney had actual overhead costs of $500,000 for 18,000 units produced, what is the difference between actual and budgeted costs?

Not-for-profit entities

A flexible budget is appropriate for Direct Labor Costs Manufacturing Overhead Costs a. No No b. Yes Yes c. Yes No d. No Yes

The activity index used in preparing a flexible budget should not influence the variable costs that are being budgeted.

Costs that relate specifically to one center and are incurred for the sole benefit of that center are

Best Shingle's budgeted manufacturing costs for 50,000 squares of shingles are: Fixed manufacturing costs \1 2,000 manufacturing costs \ 16.00 per square Best produced 40,000 squares of shingles during March.How much are budgeted total manufacturing costs in March?

Which of the following will not result in an unfavorable controllable margin difference?

A static budget is one that is geared to one level of activity.

Top management can control

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: the Big Picture

Managerial Accounting

Time Value of Money and Present Value Calculations

Filters