(a) It motivates divisional managers to make good economic decisions
(b) It is useful for evaluating performance of the divisional managers
(c) It is a selling price established for goods or services sold by one division to other under the same
(d) It does not help in measuring divisional performances
(e) All (a), (b) and (c) above.
subject to adjustments
(c) Fixed costs are important in both the pricing models
(d) In both the methods, a normal mark-up on total costs is made and the volume of production is
(d) Materials used, direct labor, overhead applied, and finished goods inventories budgets
(e) Materials used, direct labor, overhead applied, unit production, and raw materials inventories
provides costs for one level of activity
(c) A flexible budget includes only variable costs whereas a fixed budget includes only fixed costs
(d) A flexible budget is established by operating management while a fixed budget is determined by
(a) Cost incorporated in the master budget
(b) Budgeted amount in the original budget prepared before the beginning of the period
(c) Budget adjusted to the actual level of activity for the period being reported
(d) Actual amount for the same period in the preceding year
(e) Budget adjusted to the planned level of activity for the period being reported.
(a) It aggregates the monetary details of the operating budget
(b) It is calculated from the desired ending inventory and the sales forecast
(c) It includes required material purchases
(d) It includes required direct labor hours
(e) It summarizes all discretionary costs.
paid, it results in idle time variance
(c) High labor turnover is a reason for labor efficiency variance
(d) Different rates being paid to workers employed to meet seasonal demands leads to labor rate
(d) The budget period should coincide with the financial accounting period for comparison
(e) All of the above.
(a) Budgets should be administered rigidly so that people believe in them
(b) Attaining the budget is an end in itself
(c) Managers should commit to the budget and keep it as adopted
(d) Changing conditions call for changes in plans and long-term goal of the organization should be
(a) Develop forecasting procedures
(b) Organize a budget committee and appoint a budget director
(c) Report daily to operating management all deviations from the plan
(d) Report daily to top management all deviations from the plan
(e) Synchronize the budgeting and accounting systems within the organizational structure.
(a) Standard cost per unit\u00d7 (Actual loss ~ Standard loss)
(b) Standard cost per unit\u00d7 (Actual loss ~ Standard loss on actual input)
(c) Standard cost per unit\u00d7 (Actual loss ~ Standard loss on standard input)
(d) Actual cost per unit\u00d7 (Actual loss ~ Standard loss)
(e) Actual cost per unit\u00d7 (Actual loss ~ Standard loss on actual input).
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