Multiple choice

MULTIPLE CHOICE THEORIES: 1. A master budget: A) includes only financial aspects of a plan and excludes nonfinancial aspects B) is an aid to coordinating what needs to be done to implement a plan C) includes broad expectations and visionary results D) should not be altered after it has been agreed upon 2. Budgeting provides all of the following EXCEPT: A) a means to communicate the organization's short-term goals to its members B) support for the management functions of planning and coordination C) a means to anticipate problems D) an ethical framework for decision making 3. Operating budgets and financial budgets: A) combined form the master budget B) are prepared before the master budget () are prepared after the master budget D) have nothing to do with the master budget 4. A budget can do all of the following EXCEPT: A) promote coordination among subunits B) determine actual profitability C) motivate managers D) motivate employees12) Actual results should NOT be compared against past performance because: A) past results may contain mistakes and substandard performance B) past results will never happen again () past performance is an indicator of future performance D) future conditions will be similar to past conditions 13) A company's actual performance should be compared against budgeted amounts for the same accounting period so that: A) adjustments for future conditions can be included B) no feedback is possible C) inefficiencies of the past year can be included Dj a rolling budget can be implemented 14) It is advantageous to coordinate budgets with: A) suppliers B) customers C) the marketing and production departments D) All of these answers are correct. 15) A budget can help implement: A) strategic planning B) long-run planning C) short-run planning D) All of these answers are correct. 16) Under the two-variance method for analyzing factory overhead, the difference between the actual factory overhead and the factory overhead applied to production is the A) controllable variance B) Net overhead variance C) efficiency variance D) Volume variance 17. Which of the following variances is most controllable by the production control supervisor? A) material price variance B) material usage variance C) variable overhead spending variance D) Fixed overhead budget variance 18) The difference between the actual and standard price of an input, multiplied by the actual quantity equals the A) price (rate) variance B) controllable variance C) spending variance D) quantity (usage) variance 19) The difference between the actual labor rate multiplied by the actual hours worked and the standard labor rate multiplied by the standard labor hours is the A) total labor variance B) labor rate variance C) labor usage variance D) labor efficiency variance 20) Which department is customarily held responsible for an unfavorable materials usage variance? A) quality control B) purchasing C) engineering D) production5. A budget should/can do all of the following EXCEPT: A) be prepared by managers from different functional areas working independently of each other B) be adjusted if new opportunities become available during the year C) help management allocate limited resources D) become the performance standard against which firms can compare the actual results 6. If a company applies overhead to jobs on the basis of a predetermined overhead rate, a credit balance in the Manufacturing Overhead account at the end of any period means that: A more overhead cost has been charged to jobs than has been incurred during the period. B.more overhead cost has been incurred during the period than has been charged to jobs. " the amount of overhead cost charged to jobs is greater than the estimated cost for the period. R.the amount of overhead cost charged to jobs is less than the estimated cost for the period. 7) Operating budgets and financial budgets: A) combined form the master budget B) are prepared before the master budget () are prepared after the master budget D) have nothing to do with the master budget 8) A good budgeting system forces managers to examine the business as they plan, so they can: A) detect inaccurate historical records B) set specific expectations against which actual results can be compared C) complete the budgeting task on time D) get promoted for doing a good job 9) A budget should/can do all of the following EXCEPT: A) be prepared by managers from different functional areas working independently of each other B) be adjusted if new opportunities become available during the year C) help management allocate limited resources D) become the performance standard against which firms can compare the actual results 10) A limitation of comparing a company's performance against actual results of last year is that: A) it includes adjustments for future conditions B) feedback is no longer a possibility ") past results can contain inefficiencies of the past year D) the budgeting time period is set at one year 11) Challenging budgets tend to: A) decrease line-management participation in attaining corporate goals B) increase failure C) increase anxiety without motivation D) motivate improved performance