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1.) A Budget Serves As A Benchmark Against Which: A. Actual Results Can Be Compared
1.) A Budget Serves As A Benchmark Against Which: A. Actual Results Can Be Compared
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A. sales budget.
B. production budget.
C. cash budget.
D. capital budget.
B. master budget
C. financial budget.
D. profit plan.
E. capital budget.
4.) A company's expected receipts from sales and planned disbursements to pay
bills is commonly called a:
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A. pro-forma budget.
B. master budget.
C. financial budget.
D. profit plan.
E. cash budget.
5.) Which of the following statements best describes the relationship between the
sales-forecasting process and the master-budgeting process?
A. The sales forecast is typically completed after completion of the
master budget.
B. The sales forecast is typically completed approximately halfway
through the master-budget process.
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B. $255,000.
C. $270,000.
D. $244,000.
B. 32,150.
C. 32,950.
D. 33,250.
B. 49,200.
C. 49,800.
D. 52,200.
E. Some other amount.
Answer:
July beginning inventory=40% Of July sales=40%*50000=20000
July Ending inventory=40% of August sales=40%*48000-19200
Therefore,
July production=50000+19200-20000=49200
9.) An examination of Shorter Corporation's inventory accounts revealed the
following information:
Raw materials, June 1: 46,000 units
Raw materials, June 30: 51,000 units
Purchases of raw materials during June: 185,000 units
Shorter's finished product requires four units of raw materials. On the basis of
this information, how many finished products were manufactured during June?
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A. 45,000.
B. 47,500.
C. 57,750.
D. 70,500.
B. $187,125.
C. $189,125.
D. $194,750.
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$80,000, and $70,000, respectively, what were the firm's budgeted collections
for May?
A. $21,000.
B. $60,000.
C. $69,000.
D. $75,000.
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13.) Variances are computed by taking the difference between which of the
following?
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C. actual wages paid are less than amounts that should have been
paid.
D. actual units produced exceed budgeted production levels.
B. $34,000F.
C. $57,000U.
D. $57,000F.
E. None of these.
Answer:
Direct-material Quantity variance=SP*(AQ-SQ)=$8.50*(228,00056000*4)=$34,000U
19.) Courtney purchased and consumed 50,000 gallons of direct material that was 2/100
used in the production of 11,000 finished units of product. According to
engineering specifications, each finished unit had a manufacturing standard of
five gallons. If a review of Courtney's accounting records at the end of the
period disclosed a material price variance of $5,000U and a material quantity
variance of $3,000F, determine the actual price paid for a gallon of direct
material.
A. $0.50
B. $0.60.
C. $0.70
B. $11,000F.
C. $11,300U.
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D. $11,300F.
E. None of these.
Answer:
Labor Efficiency Variance=SR*(AH-SH)=$11*(14,0007,500*2)=$11,000F
21.) Lucie Corporation's purchasing manager obtained a special price on an
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aluminum alloy from a new supplier, resulting in a direct-material price
variance of $9,500F. The alloy produced more waste than normal, as evidenced
by a direct-material quantity variance of $2,000U, and was also difficult to use.
This slowed worker efficiency, generating a $2,500U labor efficiency variance.
To help remedy the situation, the production manager used senior line
employees, which gave rise to a $900U labor rate variance. If overall product
quality did not suffer, what variance amount is best used in judging the
appropriateness of the purchasing manager's decision to acquire substandard
material?
A. $4,100F.
B. $5,000F.
C. $7,000F.
D. $7,500F.
E. $9,500
Static Budget Variance=$9500F+$2,000U+$2,500U+
$900U=$4,100F
22.) A static budget:
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A. activity levels.
B. inflation rates.
C. managers.
E. standards.
24.) Interspace Merchandising anticipated selling 29,000 units of a major product 2/100
and paying sales commissions of $6 per unit. Actual sales and sales
commissions totaled 31,500 units and $182,700, respectively. If the company
used a static budget for performance evaluations, Interstate would report a cost
variance of:
A. $6,300U.
B. $6,300F.
C. $8,700U.
D. $8,700F.
B. 85,000 hours.
C. 94,000 hours.
B. $2,080,000
C. $1,984,000
D. $1,221,000
E. $2,112,000
Answer:
Flexible budget for preceding cost function=$16*90,000+
$640,000=$2,080,000
27.) Which of the following mathematical expressions is found in a typical flexible- 2/100
budget formula for overhead?
A. Total activity units + budgeted fixed overhead cost per unit.
B. Budgeted variable overhead cost per unit + budgeted fixed
overhead cost.
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A. $210,000.
B. $270,000.
C. $290,000.
D. $350,000.
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E. There is no difference.
30.) The concepts and tools used to measure the performance of people and
departments are known as:
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A. goal congruence.
C. responsibility accounting.
E. strategic control.
31.) The concepts and tools used to measure the performance of people and
departments are known as:
A. goal congruence.
B. planning and control.
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C. responsibility accounting.
E. strategic control.
32.) A revenue center manager:
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B. Revenue center.
C. Profit center.
D. Investment center.
E. Contribution center.
34.) Decentralized firms can delegate authority by structuring an organization into 2/100
responsibility centers. Which of the following organizational segments is most
like a totally independent, standalone business where managers are expected to
"make it on their own"?
A. Cost center.
B. Revenue center.
C. Profit center.
D. Investment center.
E. Contribution center.
35.) For a company that uses responsibility accounting, which of the following costs 2/100
is least likely to appear on a performance report of an assembly-line
supervisor?
A. Direct materials used.
B. Departmental supplies.
C. Assembly-line labor.
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B. $425,000.
C. $620,000.
D. $700,000.
E. $745,000.
Answer:
Contribution margin=Revenue-Varibale cost=$1,300,000$600,000=$700,000
38.) Capital-budgeting decisions primarily involve:
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A. emergency situations.
B. long-term decisions.
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B. capital budgeting.
D. cost analysis.
E. project planning
40.)
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A. revenues.
B. costs.
C. cost centers.
E. allocation tools.
41.) Discounted-cash-flow analysis focuses primarily on:
A. the stability of cash flows.
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A. payback rate.
B. hurdle rate.
C. minimal value.
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A. I only.
B. II only.
C. I and II.
D. II and III.
C. future value.
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48.) Reids Company, which uses net present value to analyze investments, requires 2/100
a 10% minimum rate of return. A staff assistant recently calculated a $500,000
machine's net present value to be $86,400, excluding the impact of straight-line
depreciation. If Reids ignores income taxes and the machine is expected to
have a five-year service life, the correct net present value of the machine would
be:
A. $(13,600).
B. $86,400.
C. $186,400.
D. $292,700.
E. $465,500.
49.) Puck Company received $18,000 cash from the sale of a machine that had a
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$13,000 book value. If the company is subject to a 30% income tax rate, the net
cash flow to use in a discounted-cash-flow analysis would be:
A. $3,500.
B. $6,500.
C. $12,600.
D. $16,500.
E. $19,500.
50.) Raymon Company received $7,000 cash from the sale of a machine that had an
$11,000 book value. If the company is subject to a 30% income tax rate, the net cash
flow to use in a discounted-cash-flow analysis would be:
A. $2,100.
B. $4,900.
C. $5,800.
D. $7,000.
E. $8,200.