MULTIPLE CHOICE – THEORIES (Write letter choice only in upper case.

Erasures, in any form, are not allowed. 2 points each) 1. When

evaluating the operating performance management sometimes uses the
difference between expected and actual performance. This refers to:
A. Management by Deviation C. Management by Objective B. Management
by Control D. Management by Exception 2. The best basis upon which
cost standards should be set to measure controllable production
inefficiencies is A. Engineering standards based on ideal performance
B. Normal capacity C. Engineering standards based on attainable
performance D. Practical capacity 3. A difference between standard
costs used for cost control and the budgeted costs representing the
same manufacturing effort can exist because A. standard costs must be
determined after the budget is completed B. standard costs represent
what costs should be while budgeted costs represent expected actual
costs C. budgeted costs are historical costs while standard costs are
based on engineering studies D. budgeted costs include some “slack”
or “padding” while standard costs do not 4. The fixed overhead
application rate is a function of a predetermined “normal” activity
level. If standard hours allowed for good output equal this
predetermined activity level for a given period, the volume variance
will be A. Zero B. Favorable C. Unfavorable D. Either favorable or
unfavorable, depending on the budgeted overhead. 5. Standards, which
are difficult to achieve due to reasons beyond the individual
performing the task, are the result of firm using which of the
following methods to establish standards? A. Ideal Standards C.
Practical Standards B. Lax Standards D. Employee Standards