Description / Instructions: Complete the Week 5 WileyPLUS Practice Quiz.
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| Why are budgets useful in the planning process?
| They enable the budget committee to earn their paycheck. |
| They provide management with information about the company's past performance. |
| They help communicate goals and provide a basis for evaluation. |
| They guarantee the company will be profitable if it meets its objectives. |
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| A common starting point in the budgeting process is
| a clean slate, with no expectations. |
| expected future net income. |
| to motivate the sales force. |
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| Which of the following statements about budget acceptance in an organization is true?
| The most widely accepted budget by the organization is the one prepared by top management. |
| The most widely accepted budget by the organization is the one prepared by the department heads. |
| Budgets are hardly ever accepted by anyone except top management. |
| Budgets have a greater chance of acceptance if all levels of management have provided input into the budgeting process. |
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| What is budgetary control?
| The use of budgets in controlling operations |
| The degree to which the CFO controls the budget |
| Another name for a flexible budget |
| The process of providing information on budget differences to lower level managers |
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| The comparison of differences between actual and planned results
| appears on the company's external financial statements. |
| is done by the external auditors. |
| is usually done orally in departmental meetings. |
| appears on periodic budget reports. |
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| A static budget
| shows planned results at the original budgeted activity level. |
| is changed only if the actual level of activity is different than originally budgeted. |
| should not be prepared in a company. |
| is useful in evaluating a manager's performance by comparing actual variable costs and planned variable costs. |
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| A responsibility report should
| only be prepared at the highest level of managerial responsibility. |
| show only those costs that a manager can control. |
| only show variable costs. |
| be prepared in accordance with generally accepted accounting principles. |
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| Which responsibility centers generate both revenues and costs?
| Cost and investment centers |
| Investment and profit centers |
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| The linens department of a large department store is
| not a responsibility center. |
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| What is a standard cost?
| The total number of units times the budgeted amount expected |
| The total amount that appears on the budget for product costs |
| Any amount that appears on a budget |
| The amount management thinks should be incurred to produce a good or service |
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| Using standard costs
| makes management by exception more difficult. |
| makes employees less "cost-conscious." |
| increases clerical costs. |
| provides a basis for evaluating cost control. |
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| Unfavorable materials price and quantity variances are generally the responsibility of the
| Production department | Purchasing department |
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| Purchasing department | Production department |
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| Production department | Production department |
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| Purchasing department | Purchasing department |
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