general business data bank

Question # 00003247 Posted By: mac123 Updated on: 11/08/2013 08:37 AM Due on: 11/27/2013
Subject Accounting Topic Accounting Tutorials:
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1. By convention, short-term financial control is accomplished by all the following except:

A. Comparing actual to budgeted financial results.

B. Calculating a series of cost and revenue variances at the end of the period.

C. The use of flexible budgets and standard costs.

D. Explaining the total operating-income variance for a given period.

E. The use of productivity analysis.

2. Operational control systems can be distinguished from financial control systems:

A. In the time horizon: financial-control systems have a long-term perspective.

B. Because they focus on the control of basic business processes.

C. Because such systems rely on the use of flexible, not static, budgets.

D. Because they focus on explaining the total operating income variance for a period.

E. They do not include nonfinancial performance indicators.

3. Traditional financial control systems have recently been criticized because:

A. They use flexible, not static, budgets.

B. They generally lead to goal-congruent behavior on the part of managers.

C. They focus more in improving basic business processes than short-term financial results.

D. They fail to incorporate nonfinancial performance indicators into the evaluation process.

E. They use static, not flexible, budgets.

4. One important short-term goal for a company is to earn the projected operating income for the period. Attainment of this goal is measured by comparing the actual operating income to the:

A. Flexible-budget operating income.

B. Prior period's operating income.

C. The income reflected in the company's balanced scorecard.

D. Master budget operating income.

E. Industry average operating income.

5. The total operating-income variance for a period reveals whether a company has achieved:

A. The sales level budgeted for the period.

B. An adequate return on investment (assets) during the period.

C. Control of basic business processes.

D. Control of total expenses for the period.

E. The master budgeted operating income for the period.

6. Another name for the total operating-income variance for a period is:

A. Flexible-budget variance.

B. Master (static) budget variance.

C. Sales-volume variance.

D. Production-volume variance.

E. Sales-mix variance.

7. Authoritative standards (within the context of a standard cost system) are determined primarily by:

A. Distributors.

B. Employees.

C. Customers.

D. Suppliers.

E. Managers.

8. The arrival of new manufacturing techniques such as automation, flexible manufacturing systems, and cluster or cell manufacturing has:

A. Emphasized the importance of direct labor variances.

B. Not had an effect on the importance of direct labor variances.

C. De-emphasized the importance of direct labor variances.

D. Made direct labor variances obsolete.

E. Eliminated the need to calculate and report direct materials variances.

9. An organization's overall management accounting and control system:

A. Includes the planning function.

B. Is also referred as the organization's core performance-measurement system.

C. Is separate from its operational control system.

D. Includes nonfinancial, but not financial, performance measures.

E. Focuses on strategic, not operational, control.

10. The "flexible budget" can best be described as a budget that adjusts:

A. Revenues for sales-dollar changes.

B. Revenues and expenses for changes in output.

C. Expenses for changes in budgeted output between two periods.

D. For efficiency, but not selling price and cost variances.

E. For selling price and cost variances, but not efficiency variances.

11. Which of the following is different in a flexible budget compared to the master budget for a period?

A. Selling price per unit.

B. Variable cost per unit.

C. Budgeted fixed cost.

D. Sales volume.

12. A flexible-budget variance measures the impact on short-term operating profit of:

A. Changes in sales volume.

B. Changes in output during the period.

C. Differences in sales mix—budgeted versus actual.

D. Selling price and cost differences—actual versus budgeted.

E. Selling price, but not cost differences—actual versus budgeted.

13. A "standard cost" is a predetermined amount (e.g., cost) that:

A. Should be incurred under relatively efficient operating conditions.

B. Will be incurred for an operation or a specific objective.

C. Must occur for an operation or a specific objective.

D. Cannot be changed once it is established by management.

E. Is useful for planning and control but not inventory valuation purposes.

14. Differences in expectation levels lead to two basic types of standards in a standard cost system:

A. Ideal and real.

B. Ideal and currently attainable.

C. Normal and conceptual.

D. Attainable and real.

E. Current and future.

15. An organization planned to use $82 of material per unit of output, but it actually used $80 per unit. During this period, the company planned to make 1,200 units, but actually produced only 1,000 units. The flexible budget amount for materials is:

A. $80,000.

B. $82,000.

C. $96,000.

D. $98,400.

16. A "currently attainable standard" emphasizes:

A. Ideal or theoretical performance.

B. Past performance of the organization.

C. Future performance of the organization's primary competitors.

D. Maximum performance.

E. Relatively efficient operating performance.

17. An organization subject to intense competitive pressures would most likely use:

A. Ideal standards for its operations.

B. Real standards for its operations.

C. Caution in even using standards.

D. A mix of types of standards.

E. Standards that are not modified over time.

18. A materials efficiency variance can be caused by all of the following except:

A. Actual output volume of the period (i.e., units produced).

B. Performance of the workers in using the materials.

C. Quality of the materials.

D. Skill level of the workers using the materials.

E. Inadequate employee supervision.

19. A standard cost system:

A. Cannot be used in conjunction with a job-cost system.

B. Is not permissible for financial-reporting purposes.

C. Is most easily introduced in conjunction with a process-cost system.

D. Is useful for planning but not control purposes.

E. Is useful for cost control but not planning purposes.

20. A ______________ standard gets progressively tighter over time.

A. Peak-efficiency.

B. Currently attainable.

C. Benchmarked.

D. Flexible-budget.

E. Continuous-improvement.

21. Using continuous-improvement standards likely has the effect(s) of all the following except:

A. Reductions in inefficiencies.

B. Reduced product defects.

C. Constantly decreasing standard levels.

D. Improved productivity.

E. Increasing pressure on employees and managers.

22. A total variable cost variance (such as for direct materials) can be broken down into separate variances that evaluate:

A. Price and efficiency.

B. Units and cost.

C. Volume and productivity.

D. Sales volume versus sales mix.

E. Efforts and results.

23. A standard cost system should be designed to generate and report variances:

A. Coincidental with regular reporting intervals.

B. As soon as possible.

C. Only when significant in amount.

D. Only when negative in impact.

E. Only when requested by decision-makers.

24. Which of the following benefits is not typically associated with a move to a just-in-time (JIT) manufacturing system?

A. Raw materials are delivered as close as possible to time of production.

B. Existence of long-term contracts with selected suppliers.

C. Reduction in employee training and education costs.

D. Decreases in manufacturing lead time.

E. Improved customer-response time (CRT).

25. The way managers and employees who are affected by a standard cost system perceive the system will:

A. Be of little consequence on the success of the system if correctly implemented.

B. Generally be minimal in impact on the implementation of the system.

C. Affect its success or failure in implementing the system.

D. Be difficult to assess.

E. Not matter in the long run.

26. For control purposes, it is usually preferable to calculate the materials price variance:

A. At point of purchase.

B. At point of production.

C. At the end of the period.

D. Only if the materials quantity variance is significant in amount.

E. Only if it is controllable by operating managers.

27. The difference between the actual operating income of the period and master budgeted operating income for the period is the:

A. Total flexible-budget variance.

B. Sales-volume variance.

C. Sales price variance.

D. Operating income flexible-budget variance.

E. Total operating income variance.

28. The difference between the actual sales volume for a period and the flexible-budget sales volume is:

A. The total sales-volume variance for the period.

B. The total production-volume variance for the period.

C. The sales price variance for the period.

D. The operating-income sales volume variance for the period.

E. A flexible-budget variance.

29. The difference between the flexible-budget operating income and the actual operating income in a period is the:

A. Sales-mix variance.

B. Sales-volume variance.

C. Sales price variance.

D. Operating income flexible-budget variance.

E. Total operating income variance.

30. The difference between the total actual sales revenue of a period and the total flexible-budget sales revenue for the units sold during the period is the:

A. Total flexible-budget variance.

B. Sales volume variance.

C. Selling price variance.

D. Operating income flexible-budget variance.

E. Operating income variance.

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