Acc Ch 22 – Flashcards
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true
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The use of budgets in controlling operations is known as budgetary control
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managers must use responsibility accounting
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which one of the following is not part of the budgetary control process?
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budgets contribute to the control of operations
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which statement is correct as it relates to budgetary control?
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using static budgets
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budgetary control involves all of the following except
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all of the above answers (daily, weekly, monthly)
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budget reports are prepared
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scrap report
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a production manager in a manufacturing company would most likely receive a
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all of the above answers (developing, analyzing, corrective action)
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budgetary control involves
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false
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a static budget report is appropriate for variable manufacturing costs
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when the company performs at the same activity level as the static budget level
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Ace Company monitors its managers performance using a static budget. Which one of the following situations will provide the fairest evaluation for those managers?
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fixed overhead costs
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for which of the following costs is a static budget most appropriate
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a projection of budget data at a single level of activity
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a static budget is
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fixed
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a static budget is useful in controlling costs when cost behavior is
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static budget
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a projection of budget data at one level of activity is a
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fixed manufacturing costs and fixed selling & administrative expenses
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a static budget report is appropriate for
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false
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a flexible budget projects budget data for one level of activity
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true
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the first step in developing a flexible budget is to identify the activity index and the relevant range of activity
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false
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management by exception means that top management will investigate every budget difference
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budgeted amounts for the actual activity level achieved
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what budgeted amounts appear on the flexible budget report?
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identify the activity index and the relevant range of activity
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which one of the following is a step that management must perform when developing the flexible budget?
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$30,000 fixed plus $6 per direct labor hour variable
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at zero direct labor hours in a flexible budget graph, the total budgeted cost line intersects the vertical axis at $30,000. At 10,000 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
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$400 unfavorable
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at 9,000 direct labor hours, the flexible budget for indirect materials is $27,000. If $28,000 of indirect materials costs are incurred at 9,200 direct labour hours, the flexible budget report should show the following difference for indirect materials
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flexible budget
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A projection of budget data for various levels of activity is a
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identify the fixed costs and determine the budgeted fixed cost per unit
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which of the following steps is not taken by management when developing a flexible budget?
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supervision
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In a flexible budget, a cost that would remain the same at each activity level is
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$332,000
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In-Step Manufacturing uses a flexible budget. It has the following budgeted manufacturing costs for 25,000 pairs of shoes: Fixed Manufacturing Costs, $12,000 and Variable Manufacturing Costs, $16.00 per pair of shoes. If In-step Manufacturing makes 20,000 pairs of shoes this month, what are the total budgeted manufacturing cost for the month?
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56,000 machine hours
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The processing department has monthly budgeted manufacturing overhead of $180,000 plus $3.00 per machine hour. If a flexible budget report shows $348,000 for total budgeted manufacturing overhead costs for the month, what was the actual level of activity achieved during the month?
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true
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Costs incurred indirectly and allocated to a responsibility level are considered to be non-controllable at that level
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true
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Cost centers are usually either production departments or service departments
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means that top management has to investigate every budget difference
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all of the following statements are correct about management by exception except it
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the department manager sees a controllable costs of his or her respective department
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a company produces four reports in its responsibility reporting system, one for each level of management: department managers, plant managers, division managers, and the company vice president. Which statement is correct concerning the content of the respective reports?
