Question 1

Myopic behaviour occurs when

Accepted Answer

A)  actions improve budgetary performance in the short-run but are harmful in the long run. 
B)  there is uncertainty. 
C)  there is focus on immediate costs. 
D)  actions improve budgetary performance in the distant time horizon. 
A)  actions improve budgetary performance in the short-run but are harmful in the long run. 
B)  there is uncertainty. 
C)  there is focus on immediate costs. 
D)  actions improve budgetary performance in the distant time horizon.

Question 2

When the reaction to a budget is negative, resulting in managerial behaviour that is negative for the organization, the resulting behaviour is known as

Accepted Answer

A)  dysfunctional behaviour. 
B)  psychopathic behaviour. 
C)  congruent behaviour. 
D)  sociopathic behaviour. 
A)  dysfunctional behaviour. 
B)  psychopathic behaviour. 
C)  congruent behaviour. 
D)  sociopathic behaviour.

Question 3

The ideal budget system creates

Accepted Answer

A)  extreme caution in managers. 
B)  drive and risk avoidance in managers. 
C)  drive and goal congruence in managers. 
D)  none of the above. 
A)  extreme caution in managers. 
B)  drive and risk avoidance in managers. 
C)  drive and goal congruence in managers. 
D)  none of the above.

Question 4

Klamaty, SA., is looking for feedback on performance. The company compares the budget for the year with the actual costs.
Klamaty, SA., had the following budgeted data:
Required:
   
a.
Prepare a performance report for all costs showing static budget variances.
b.
Prepare a performance report for all costs showing flexible budget variances.

Accepted Answer

The answer of Klamaty, SA., is looking for feedback on...

Question 5

What is budgetary slack? Why does it occur? What is the primary indication that budgetary slack is occurring?

Accepted Answer

Budgetary slack is the tendency of some

Question 6

Armati, SA., is looking for feedback on company performance. The company compares the budget for the year with the actual costs. Data have been collected below: Armati, SA., had the following budgeted data:
The following actually occurred:
  The static budget for total variable costs is

Accepted Answer

A)  £90 U. 
B)  £180 U. 
C)  £790 F. 
D)  £880 F. 
A)  £90 U. 
B)  £180 U. 
C)  £790 F. 
D)  £880 F.

Question 7

Which of the following is NOT a key feature of an ideal budgetary system?

Accepted Answer

A)  controllable costs 
B)  single measure for performance 
C)  incentives 
D)  frequent feedback 
A)  controllable costs 
B)  single measure for performance 
C)  incentives 
D)  frequent feedback

Question 8

Which of the following must be addressed if budgets are to be used in performance evaluation?

Accepted Answer

A)  determine how budgeted amounts should be compared with actual results 
B)  consider the impact of budgets on human behaviour 
C)  both a and b 
D)  neither a nor b 
A)  determine how budgeted amounts should be compared with actual results 
B)  consider the impact of budgets on human behaviour 
C)  both a and b 
D)  neither a nor b

Question 9

Harald, SA., has done a cost analysis for its production of bumper stickers. The following activities and cost drivers have been developed: Following are the actual costs of producing 85,000 stickers: 5,000 machine hours; 10 batches; 20 purchase orders
  What is the budget variance for machining in an activity-based performance report?

Accepted Answer

A)  £50 F 
B)  £50 U 
C)  £800 U 
D)  none of the above 
A)  £50 F 
B)  £50 U 
C)  £800 U 
D)  none of the above

Question 10

If production was budgeted at 400 units and the actual production was 420 units, what would be the static budget variance for materials if the actual cost of materials was £4,150 and the budgeted cost per unit is £10?

Accepted Answer

A)  £50 F 
B)  £200 U 
C)  £100 F 
D)  £150 U 
A)  £50 F 
B)  £200 U 
C)  £100 F 
D)  £150 U

Question 11

Riemay, SA., has done a cost analysis for its production of sports cards. The following activities and cost drivers have been developed:
Following are the actual costs of producing 35,000 cards:
60 labour hours; 500 machine hours; 5 batches; 30 purchase orders
   The following variances were given in the activity performance report:
   Required:
Find the missing values.
Prepare an activity-based performance report in good form

Accepted Answer

The answer of Riemay, SA., has done a cost analysis...

Question 12

Which cost centre listed below is evaluated with the aid of flexible budgets drawn up for the actual level of activity?

Accepted Answer

A)  discretionary cost centres 
B)  standard cost centres 
C)  non-relational cost centres 
D)  flexible cost centres 
A)  discretionary cost centres 
B)  standard cost centres 
C)  non-relational cost centres 
D)  flexible cost centres

Question 13

A flexible-based budgeting system

Accepted Answer

A)  uses functional-based line items. 
B)  splits costs into variable and fixed components. 
C)  prepares budgets for a range of activity levels. 
D)  All of the above are correct. 
A)  uses functional-based line items. 
B)  splits costs into variable and fixed components. 
C)  prepares budgets for a range of activity levels. 
D)  All of the above are correct.

Question 14

Harald, SA., has done a cost analysis for its production of bumper stickers. The following activities and cost drivers have been developed: Following are the actual costs of producing 85,000 stickers: 5,000 machine hours; 10 batches; 20 purchase orders
  What is the budget variance for setups in an activity-based performance report?

Accepted Answer

A)  £50 F 
B)  £50 U 
C)  £800 U 
D)  none of the above 
A)  £50 F 
B)  £50 U 
C)  £800 U 
D)  none of the above

Question 15

What is the best description listed below of a discretionary cost centre?

Accepted Answer

A)  a cost centre with defined relationships between effort and employee pay 
B)  a cost centre that allows employees to define the centre's goals using their own discretion 
C)  a cost centre that does not have clearly defined relationships between effort and accomplishments 
D)  a cost centre that designates ten percent of its budgeted costs toward building employee morale. 
A)  a cost centre with defined relationships between effort and employee pay 
B)  a cost centre that allows employees to define the centre's goals using their own discretion 
C)  a cost centre that does not have clearly defined relationships between effort and accomplishments 
D)  a cost centre that designates ten percent of its budgeted costs toward building employee morale.

Question 16

Villafane, SA., has done a cost analysis for its production of decals. The following activities and cost drivers have been developed: Following are the actual costs of producing 35,000 decals: 1,000 machine hours; 5 batches; 30 purchase orders
  The following variances were given in the activity performance report:
  What is the actual cost of setups?

Accepted Answer

A)  £160 
B)  £190 
C)  £300 
D)  none of the above 
A)  £160 
B)  £190 
C)  £300 
D)  none of the above

Question 17

If production was budgeted at 400 units and the actual production was 420 units, what would be the flexible budget variance for materials if the actual cost of materials was £4,150 and the budgeted cost per unit is £10?

Accepted Answer

A)  £50 F 
B)  £200 U 
C)  £100 F 
D)  £150 U 
A)  £50 F 
B)  £200 U 
C)  £100 F 
D)  £150 U

Question 18

Armati, SA., is looking for feedback on company performance. The company compares the budget for the year with the actual costs. Data have been collected below: Armati, SA., had the following budgeted data:
The following actually occurred:
  The static budget variance for direct materials is

Accepted Answer

A)  £100 F. 
B)  £100 U. 
C)  £400 F. 
D)  £400 U. 
A)  £100 F. 
B)  £100 U. 
C)  £400 F. 
D)  £400 U.

Question 19

Which of the following departments is likely to be evaluated as a discretionary cost centre?

Accepted Answer

A)  the machining department of an automotive division 
B)  the food products division of a large PLc 
C)  the personnel department of an automotive division 
D)  the Men's shoe department of a department store 
A)  the machining department of an automotive division 
B)  the food products division of a large PLc 
C)  the personnel department of an automotive division 
D)  the Men's shoe department of a department store

Question 20

Which of the following is not an objective of responsibility accounting?

Accepted Answer

A)  to redesign processes to be more effective 
B)  to align individual and organizational goals 
C)  to influence behaviour 
D)  to increase profitability 
A)  to redesign processes to be more effective 
B)  to align individual and organizational goals 
C)  to influence behaviour 
D)  to increase profitability

Myopic behaviour occurs when

When the reaction to a budget is negative, resulting in managerial behaviour that is negative for the organization, the resulting behaviour is known as

The ideal budget system creates

What is budgetary slack? Why does it occur? What is the primary indication that budgetary slack is occurring?

Armati, SA., is looking for feedback on company performance. The company compares the budget for the year with the actual costs. Data have been collected below: Armati, SA., had the following budgeted data: The following actually occurred: The static budget for total variable costs is

Which of the following is NOT a key feature of an ideal budgetary system?

Which of the following must be addressed if budgets are to be used in performance evaluation?

If production was budgeted at 400 units and the actual production was 420 units, what would be the static budget variance for materials if the actual cost of materials was £4,150 and the budgeted cost per unit is £10?

Which cost centre listed below is evaluated with the aid of flexible budgets drawn up for the actual level of activity?

A flexible-based budgeting system

What is the best description listed below of a discretionary cost centre?

If production was budgeted at 400 units and the actual production was 420 units, what would be the flexible budget variance for materials if the actual cost of materials was £4,150 and the budgeted cost per unit is £10?

Armati, SA., is looking for feedback on company performance. The company compares the budget for the year with the actual costs. Data have been collected below: Armati, SA., had the following budgeted data: The following actually occurred: The static budget variance for direct materials is

Which of the following departments is likely to be evaluated as a discretionary cost centre?

Which of the following is not an objective of responsibility accounting?

Introduction to Management Accounting

An Introduction to Cost Terms and Concepts

Cost-Volume-Profit Analysis

Measuring Relevant Costs and Revenues for Decision-Making

Pricing Decisions and Profitability Analysis

Capital Investment Decisions

Cost Assignment

Activity-Based Costing

The Budgeting Process

Standard Costing and Variance Analysis

Divisional Financial Performance Measurement

Transfer Pricing in Divisionalized Companies

Cost Management

Strategic Performance Management

Filters

Exam 10: Management Control Systems

Myopic behaviour occurs when

When the reaction to a budget is negative, resulting in managerial behaviour that is negative for the organization, the resulting behaviour is known as

The ideal budget system creates

What is budgetary slack? Why does it occur? What is the primary indication that budgetary slack is occurring?

Armati, SA., is looking for feedback on company performance. The company compares the budget for the year with the actual costs. Data have been collected below: Armati, SA., had the following budgeted data: The following actually occurred: The static budget for total variable costs is

Which of the following is NOT a key feature of an ideal budgetary system?

Which of the following must be addressed if budgets are to be used in performance evaluation?

If production was budgeted at 400 units and the actual production was 420 units, what would be the static budget variance for materials if the actual cost of materials was £4,150 and the budgeted cost per unit is £10?

Which cost centre listed below is evaluated with the aid of flexible budgets drawn up for the actual level of activity?

A flexible-based budgeting system

What is the best description listed below of a discretionary cost centre?

If production was budgeted at 400 units and the actual production was 420 units, what would be the flexible budget variance for materials if the actual cost of materials was £4,150 and the budgeted cost per unit is £10?

Armati, SA., is looking for feedback on company performance. The company compares the budget for the year with the actual costs. Data have been collected below: Armati, SA., had the following budgeted data: The following actually occurred: The static budget variance for direct materials is

Which of the following departments is likely to be evaluated as a discretionary cost centre?

Which of the following is not an objective of responsibility accounting?

Introduction to Management Accounting

An Introduction to Cost Terms and Concepts

Cost-Volume-Profit Analysis

Measuring Relevant Costs and Revenues for Decision-Making

Pricing Decisions and Profitability Analysis

Capital Investment Decisions

Cost Assignment

Activity-Based Costing

The Budgeting Process

Standard Costing and Variance Analysis

Divisional Financial Performance Measurement

Transfer Pricing in Divisionalized Companies

Cost Management

Strategic Performance Management

Filters