Question 1

What are the five steps involved in implementing a cost control system?

Accepted Answer

The five steps are as follows:
1.Understand the type of costs incurred by an organization.
2.Communicate the need for cost consciousness to all employees.
3.Educate employees in cost control techniques,encourage them to suggest ways to control costs,and motivate them to embrace the concepts.
4.Generate reports that indicate actual results,compare budget to actual and calculate variances.
5.Develop a view that the cost control system is a long-run process,not a short run solution.

Question 2

If an actual discretionary cost is exactly equal to the budgeted level of that cost,which of the following statements is true?

Accepted Answer

A) Funds were appropriately spent. 
B) The discretionary activity was efficient. 
C) The discretionary activity was effective. 
D) None of the above. 
A) Funds were appropriately spent. 
B) The discretionary activity was efficient. 
C) The discretionary activity was effective. 
D) None of the above. D

Question 3

Costs that are necessary to sustain an organization's operations are referred to as ____________________________.

Accepted Answer

committed costs

Question 4

Radtke Company has provided the following information for the month of November:
 $\begin{array}{ll}
\underline{\text { Actual  }} &\underline{\text { standards }} \
\text {800 units produced} &  2 \mathrm{DLH} \text { per unit } @ \$ 5.00\\
\text { Actual DL cost $ \$ 6.750 $ } &\$ 1 \text { fixed overhead per DLH}\
\end{array}$
Assume that Radtke Company hires full-time employees who are paid a total of $6,500 per month.
Compute the spending and volume variances.

Accepted Answer

Assume that Radtke Company hir

Question 5

Discretionary costs are often difficult to control because

Accepted Answer

A) it is difficult to measure the cost. 
B) they cannot be changed in the short run. 
C) they cannot be changed from period to period. 
D) it is difficult to measure the benefits of discretionary activities. 
A) it is difficult to measure the cost. 
B) they cannot be changed in the short run. 
C) they cannot be changed from period to period. 
D) it is difficult to measure the benefits of discretionary activities.

Question 6

A cost that must be reviewed periodically to determine if it is still appropriate and necessary is referred to as a __________________________________________.

Accepted Answer

The answer of A cost that must be reviewed periodically...

Question 7

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

Accepted Answer

1. Lack of 1centification of underistand

Question 8

Accelerating inventory turnover will increase an organization's levels of cash.

Accepted Answer

A) True 
 B)False

Question 9

Research and development expenses are normally considered to be discretionary costs.

Accepted Answer

A) True 
 B)False

Question 10

Discuss the various elements of the cost control process.

Accepted Answer

Cost understanding is one element of a c

Question 11

Effective cost control begins in the planning stage of the management cycle.

Accepted Answer

A) True 
 B)False

Question 12

Discretionary activities in an organization are determined based on

Accepted Answer

A) organizational policies and managerial preferences. 
B) the budgeted amount from the prior period. 
C) the level of long-term investment. 
D) an organization's internal control. 
A) organizational policies and managerial preferences. 
B) the budgeted amount from the prior period. 
C) the level of long-term investment. 
D) an organization's internal control.

Question 13

When a CPA firm uses taped lectures rather than live presentations for continuing education,it is engaging in a cost reduction strategy.

Accepted Answer

A) True 
 B)False

Question 14

The benefits of discretionary costs are usually measurable in monetary terms.

Accepted Answer

A) True 
 B)False

Question 15

If a firm is successful in meeting its output goal for a period,the firm has been

Accepted Answer

A) efficient. 
B) effective. 
C) profitable. 
D) exercising cost containment measures. 
A) efficient. 
B) effective. 
C) profitable. 
D) exercising cost containment measures.

Question 16

For cost control purposes,fixed costs are classified as

Accepted Answer

A) product or period costs. 
B) discretionary or committed. 
C) direct or common. 
D) sunk or avoidable. 
A) product or period costs. 
B) discretionary or committed. 
C) direct or common. 
D) sunk or avoidable.

Question 17

Costs that have been found to bear observable and known relationships to a quantifiable activity base are referred to as __________________________________.

Accepted Answer

The answer of Costs that have been found to bear...

Question 18

Setting organizational goals and objectives and preparing a budget are aspects of control

Accepted Answer

A) during an event. 
B) before an event. 
C) after an event. 
D) before,during,and after an event. 
A) during an event. 
B) before an event. 
C) after an event. 
D) before,during,and after an event.

Question 19

The maximum allowable expenditure is the

Accepted Answer

A) appropriation. 
B) allowance. 
C) allocation. 
D) committed fixed cost. 
A) appropriation. 
B) allowance. 
C) allocation. 
D) committed fixed cost.

Question 20

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

Accepted Answer

A) program budgeting. 
B) zero-base budgeting. 
C) capital budgeting. 
D) flexible budgeting. 
A) program budgeting. 
B) zero-base budgeting. 
C) capital budgeting. 
D) flexible budgeting.

What are the five steps involved in implementing a cost control system?

If an actual discretionary cost is exactly equal to the budgeted level of that cost,which of the following statements is true?

Costs that are necessary to sustain an organization's operations are referred to as ____________________________.

Discretionary costs are often difficult to control because

A cost that must be reviewed periodically to determine if it is still appropriate and necessary is referred to as a __________________________________________.

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

Accelerating inventory turnover will increase an organization's levels of cash.

Research and development expenses are normally considered to be discretionary costs.

Discuss the various elements of the cost control process.

Effective cost control begins in the planning stage of the management cycle.

Discretionary activities in an organization are determined based on

When a CPA firm uses taped lectures rather than live presentations for continuing education,it is engaging in a cost reduction strategy.

The benefits of discretionary costs are usually measurable in monetary terms.

If a firm is successful in meeting its output goal for a period,the firm has been

For cost control purposes,fixed costs are classified as

Costs that have been found to bear observable and known relationships to a quantifiable activity base are referred to as __________________________________.

Setting organizational goals and objectives and preparing a budget are aspects of control

The maximum allowable expenditure is the

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

Introduction to Cost Accounting

Cost Terminology and Cost Behaviors

Predetermined Overhead Rates, Flexible Budgets, and Absorptionvariable Costing

Activity-Based Management and Activity-Based Costing

Job Order Costing

Process Costing

Standard Costing and Variance Analysis

The Master Budget

Break-Even Point and Cost-Volume-Profit Analysis

Relevant Information for Decision Making

Allocation of Joint Costs and Accounting for By-Products

Introduction to Cost Management Systems

Responsibility Accounting,support Department Allocations,and Transfer Pricing

Performance Measurement, balanced Scorecards, and Performance Rewards

Capital Budgeting

Implementing Quality Concepts

Inventory and Production Management

Emerging Management Practices

Filters

Exam 16: Managing Costs and Uncertainty

What are the five steps involved in implementing a cost control system?

If an actual discretionary cost is exactly equal to the budgeted level of that cost,which of the following statements is true?

Costs that are necessary to sustain an organization's operations are referred to as ____________________________.

Discretionary costs are often difficult to control because

A cost that must be reviewed periodically to determine if it is still appropriate and necessary is referred to as a __________________________________________.

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

Accelerating inventory turnover will increase an organization's levels of cash.

Research and development expenses are normally considered to be discretionary costs.

Discuss the various elements of the cost control process.

Effective cost control begins in the planning stage of the management cycle.

Discretionary activities in an organization are determined based on

When a CPA firm uses taped lectures rather than live presentations for continuing education,it is engaging in a cost reduction strategy.

The benefits of discretionary costs are usually measurable in monetary terms.

If a firm is successful in meeting its output goal for a period,the firm has been

For cost control purposes,fixed costs are classified as

Costs that have been found to bear observable and known relationships to a quantifiable activity base are referred to as __________________________________.

Setting organizational goals and objectives and preparing a budget are aspects of control

The maximum allowable expenditure is the

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

Introduction to Cost Accounting

Cost Terminology and Cost Behaviors

Predetermined Overhead Rates, Flexible Budgets, and Absorptionvariable Costing

Activity-Based Management and Activity-Based Costing

Job Order Costing

Process Costing

Standard Costing and Variance Analysis

The Master Budget

Break-Even Point and Cost-Volume-Profit Analysis

Relevant Information for Decision Making

Allocation of Joint Costs and Accounting for By-Products

Introduction to Cost Management Systems

Responsibility Accounting,support Department Allocations,and Transfer Pricing

Performance Measurement, balanced Scorecards, and Performance Rewards

Capital Budgeting

Implementing Quality Concepts

Inventory and Production Management

Emerging Management Practices

Filters