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BUDGETARY CONTROL AND RESPONSIBILITY ACCOUNTING mcq homework

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Question;79. Stone Industries uses flexible budgets. At;normal capacity of 16,000 units, budgeted manufacturing overhead is: $48,000 variable and $270,000 fixed. If Stone;had actual overhead costs of $321,000 for 18,000 units produced, what is the;difference between actual and budgeted costs?;a. $3,000;unfavorable;b. $3,000;favorable;c. $9,000;unfavorable;d. $12,000;favorable;80. A company's planned activity level for next;year is expected to be 100,000 machine hours. At this level of activity, the;company budgeted the following manufacturing overhead costs;Variable Fixed;Indirect materials $140,000 Depreciation $60,000;Indirect labor 200,000 Taxes 10,000;Factory supplies 20,000 Supervision 50,000;A flexible budget prepared at the;80,000 machine hours level of activity would show total manufacturing overhead;costs of;a. $288,000.;b. $360,000.;c. $384,000.;d. $408,000.;81. In the Goblette Manufacturing Company;indirect labor is budgeted for $108,000 and factory supervision is budgeted for;$36,000 at normal capacity of 160,000 direct labor hours. If 180,000 direct;labor hours are worked, flexible budget total for these costs is;a. $144,000.;b. $162,000.;c. $157,500.;d. $148,500.;82. Chambers, Inc. uses flexible budgets. At;normal capacity of 16,000 units, budgeted manufacturing overhead is: $64,000;variable and $180,000 fixed. If Chambers had actual overhead costs of $250,000;for 18,000 units produced, what is the difference between actual and budgeted;costs?;a. $2,000 unfavorable.;b. $2,000 favorable.;c. $6,000 unfavorable.;d. $8,000 favorable.;83. A company's planned activity level for next;year is expected to be 100,000 machine hours. At this level of activity, the;company budgeted the following manufacturing overhead costs;Variable Fixed;Indirect materials $120,000 Depreciation $50,000;Indirect labor 160,000 Taxes 10,000;Factory supplies 20,000 Supervision 40,000;A flexible budget prepared at the;90,000 machine hours level of activity would show total manufacturing overhead;costs of;a. $270,000.;b. $360,000.;c. $370,000.;d. $300,000.;84. Kevin Jarvis Industries produced 192,000;units in 90,000 direct labor hours. Production for the period was estimated at 198,000;units and 99,000 direct labor hours. A flexible budget would compare budgeted;costs and actual costs, respectively, at;a. 96,000 hours and 99,000 hours.;b. 99,000 hours and 90,000 hours.;c. 96,000 hours and 90,000 hours.;d. 90,000 hours and 90,000 hours.;85. A company's planned activity level for next;year is expected to be 100,000 machine hours. At this level of activity, the;company budgeted the following manufacturing overhead costs;Variable Fixed;Indirect materials $90,000 Depreciation $37,500;Indirect labor 120,000 Taxes 7,500;Factory supplies 15,000 Supervision 30,000;A flexible budget prepared at the;90,000 machine hours level of activity would show total manufacturing overhead;costs of;a. $202,500.;b. $270,000.;c. $277,500.;d. $225,000.;86. Kathleen Corp. produced 320,000 units in 150,000;direct labor hours. Production for the period was estimated at 330,000 units;and 165,000 direct labor hours. A flexible budget would compare budgeted costs;and actual costs, respectively, at;a. 160,000 hours and 165,000 hours.;b. 165,000 hours and 150,000 hours.;c. 160,000 hours and 150,000 hours.;d. 150,000 hours and 150,000 hours.;\;87. At zero direct labor hours in a flexible;budget graph, the total budgeted cost line intersects the vertical axis at $30,000.;At 15,000 direct labor hours, a horizontal line drawn from the total budgeted;cost line intersects the vertical axis at $90,000. Fixed and variable costs may;be expressed as;a. $30,000 fixed plus $4 per direct labor hour;variable.;b. $30,000 fixed plus $6 per direct labor hour;variable.;c. $60,000 fixed plus $2 per direct labor hour;variable.;d. $60,000 fixed plus $4 per direct labor hour;variable.;88. At 18,000 direct labor hours, the flexible;budget for indirect materials is $36,000. If $37,400 are incurred at 18,400;direct labor hours, the flexible budget report should show the following;difference for indirect materials;a. $1,400 unfavorable.;b. $1,400 favorable.;c. $600 favorable.;d. $600 unfavorable.;89. The accumulation of accounting data on the;basis of the individual manager who has the authority to make day-to-day;decisions about activities in an area is called;a. static reporting.;b. flexible accounting.;c. responsibility accounting.;d. master budgeting.;90. Power Manufacturing;recorded operating data for its shoe division for the year.;Sales $1,500,000;Contribution margin 300,000;Controllable fixed costs 180,000;Average total operating assets 600,000;How much is controllable margin for the year?;a. 20%;b. 50%;c. $300,000;d. $120,000;91. A cost is considered controllable at a;given level of managerial responsibility if;a. the manager has the power to incur the cost;within a given time period.;b. the cost has not exceeded the budget amount;in the master budget.;c. it is a variable cost, but it is;uncontrollable if it is a fixed cost.;d. it changes in magnitude in a flexible budget.;92. As one moves up to each higher level of;managerial responsibility;a. fewer costs are controllable.;b. the responsibility for cost incurrence;diminishes.;c. a greater number of costs are controllable.;d. performance evaluation becomes less;important.;93. A responsibility report should;a. be prepared in accordance with generally;accepted accounting principles.;b. show only those costs that a manager can;control.;c. only show variable costs.;d. only be prepared at the highest level of;managerial responsibility.;94. Top management can control;a. only controllable costs.;b. only noncontrollable costs.;c. all costs.;d. some noncontrollable costs and all;controllable costs.;95. Not-for-profit entities;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.;96. Which of the following is not a true statement?;a. All costs are controllable at some level;within a company.;b. Responsibility accounting applies to both;profit and not-for-profit entities.;c. Fewer costs are controllable as one moves up;to each higher level of managerial responsibility.;d. The term segment;is sometimes used to identify areas of responsibility in decentralized;operations.;97. Costs incurred indirectly and allocated to;a responsibility level are considered to be;a. nonmaterial.;b. mixed.;c. controllable.;d. noncontrollable.;98. Management by exception;a. is most effective at top levels of;management.;b. can be implemented at each level of;responsibility within an organization.;c. can only be applied when comparing actual;results with the master budget.;d. is the opposite of goal congruence.;99. Which responsibility;centers generate both revenues and costs?;a. Investment;and profit centers;b. Profit;and cost centers;c. Cost;and investment centers;d. Only profit centers;100. The linens department of a large department;store is;a. not a responsibility center.;b. a profit center.;c. a cost center.;d. an investment center.;101. The foreign subsidiary of a large;corporation is;a. not a responsibility center.;b. a profit center.;c. a cost center.;d. an investment center.;102. The maintenance department of a manufacturing;company is a(n);a. segment.;b. profit center.;c. cost center.;d. investment center.;103. Which of the following is not a correct match?;1. Incurs;costs;2. Generates;revenue;3. Controls;investment funds;a. Investment Center 1, 2, 3;b. Cost Center 1;c. Profit Center 1, 2, 3;d. All are correct matches.;104. A;cost center;a. only incurs costs and does not directly;generate revenues.;b. incurs costs and generates revenues.;c. is a responsibility center of a company which;incurs losses.;d. is a responsibility center which generates;profits and evaluates the investment cost of earning the profit.;105. A manager of a cost center is evaluated;mainly on;a. the profit that the center generates.;b. his or her ability to control costs.;c. the amount of investment it takes to support;the cost center.;d. the amount of revenue that can be generated.;106. Performance;reports for cost centers compare actual;a. total costs with static budget data.;b. total costs with flexible budget data.;c. controllable costs with static budget data.;d. controllable costs with flexible budget data.;107. In the performance report for cost centers;a. controllable and noncontrollable costs are;reported.;b. fixed costs are not reported.;c. no distinction is made between fixed and;variable costs.;d. only materials and controllable costs are;reported.;108. Of the following choices, which contain;both a traceable fixed cost and a common fixed cost?;a. Profit center manager's salary and;timekeeping costs for a responsibility center's employees.;b. Company president's salary and company;personnel department costs.;c. Company personnel department costs and;timekeeping costs for a responsibility center's employees.;d. Depreciation on a responsibility center's;equipment and supervisory salaries for the center.;Ans: C;LO: 5, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB;Industry/Sector, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Budget;Preparation;109. Which of the following is not an indirect fixed cost?;a. Company president's salary;b. Depreciation on the company building housing;several profit centers;c. Company personnel department costs;d. Profit center supervisory salaries;110. A;profit center is;a. a responsibility center that always reports a;profit.;b. a responsibility center that incurs costs and;generates revenues.;c. evaluated by the rate of return earned on the;investment allocated to the center.;d. referred to as a loss center when operations;do not meet the company's objectives.;111. The best measure of the performance of the;manager of a profit center is the;a. rate of return on investment.;b. success in meeting budgeted goals for;controllable costs.;c. amount of controllable margin generated by;the profit center.;d. amount of contribution margin generated by;the profit center.;112. Controllable margin is defined as;a. sales minus variable costs.;b. sales minus contribution margin.;c. contribution margin less controllable fixed;costs.;d. contribution margin less noncontrollable;fixed costs.;113. Controllable margin is most useful for;a. external financial reporting.;b. preparing the master budget.;c. performance evaluation of profit centers.;d. break-even analysis.;114. Which of the following will not result in an unfavorable controllable;margin difference?;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;115. Given below is an excerpt from a management;performance report;Budget;Actual Difference;Contribution margin $1,000,000 $1,050,000 $50,000;Controllable fixed costs $;500,000 $ 450,000 $50,000;The manager's overall performance;a. is 20% below expectations.;b. is 20% above expectations.;c. is equal to expectations.;d. cannot be determined from information given.;116. Which;of the following are financial measures of performance?;1. Controllable;margin;2. Product;quality;3. Labor;productivity;a. 1;b. 2;c. 3;d. 1 and 3;117. Given below is an excerpt from a management;performance report;Budget;Actual Difference;Contribution margin $600,000 $580,000 $20,000 U;Controllable fixed costs $200,000 $220,000 $20,000 U;The manager's overall performance;a. is 10% above expectations.;b. is 10% below expectations.;c. is equal to expectations.;d. cannot be determined from the information;provided.;118. A;responsibility report for a profit center will;a. not show controllable fixed costs.;b. not show indirect fixed costs.;c. show noncontrollable fixed costs.;d. not show cumulative year-to-date results.;119. The dollar amount of the controllable;margin;a. is usually higher than the contribution;margin.;b. is usually lower than the contribution;margin.;c. is always equal to the contribution margin.;d. cannot be a negative figure.;120. Pippen Co. recorded operating data for its;shoe division for the year. The company?s desired return is 5%.;Sales $1,000,000;Contribution margin 200,000;Total direct fixed costs 120,000;Average total operating assets 400,000;Which one of the following reflects the controllable margin for the;year?;a. 20%;b. 50%;c. $60,000;d. $80,000

 

Paper#41768 | Written in 18-Jul-2015

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