16) Using a broad average to assign costs to products or services may lead to undercosting or overcosting.

TRUE FALSE

17) Inaccurate product costs can expose a company to the risk of losing market share to competitors.

TRUE FALSE

19) Using a broad average to assign costs to products or services may lead to undercosting or overcosting.

TRUE FALSE

20) A top-selling product might actually result in recorded losses for the company.

TRUE FALSE

Chapter 6 Master Budget and Responsibility Accounting

21) A budget is a quantitative expression for a set time period of a proposed future plan of action by management.

TRUE FALSE

22) The master budget summarizes all the financial and nonfinancial plans into a single document.

TRUE FALSE

23) The master budget embraces the impact of both operating decisions and financing decisions as related to acquisitions and uses of scarce resources.

TRUE FALSE

Chapter 7 Flexible Budgets, Variances, and Management Control: I

24) A variance is the difference between the actual result and a budgeted amount.

TRUE FALSE

25) Variances and flexible budgets help managers gain insights into why actual results differ from planned performance.

TRUE FALSE

26) A static budget is a budget that can be changed or altered after it is developed.

TRUE FALSE

Chapter 8 Flexible Budgets, Variances, and Management Control: II

27) Capacity refers to the quantity of outputs that can be produced from long-term resources available to the company.

TRUE FALSE

28) Capacity cost is a variable overhead cost.

True False