ACC 363 Study Guide - Income Statement, Accounts Payable, Internal Control
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12. _____ is an example of a monetary incentiveused to control a manager's tendency to shirk and wasteresources.
a. A recognition program
b. Job enrichment
c. A promotion
13. Which of the following is true ofparticipative budgeting?
a. It imposes budgets on subordinate managers.
b. It fosters a sense of responsibility among managers.
d. It discourages creativity.
14. In March, Burlywood had the followingresults:
Production:
Units in process, March 1, 80% complete | 36,000 units |
Units completed and transferred out | 120,000 units |
Units in process, March 31, 40% complete | 44,500 units |
Costs: | |
Work in process, March 1 | $11,600 |
Costs added during March | $32,000 |
Determine the total cost to be assigned using the first-in,first-out costing method.
a. $55,200
c. $48,080
d. $52,320
9. In cost-volume-profit analysis, amultiple-product problem is converted into a single-product problemby:
a. determining the sales prices.
b. defining the features of the products.
c. determining the unit variable cost.
d. defining a particular sales mix inunits.
13. Which of the following is true ofsensitivity analysis?
a. It allows managers to vary costs, prices, and salesmix to show various possible break-even points.
b. It can be performed only when managers have accurate dataabout financial forecasts.
c. It provides accurate data about sales, contribution margin,and operating income without ambiguity.
d. It can be easily performed on hand with limited knowledge ofrevenue and cost systems.
1.Decisions that involve choosing betweendifferent alternatives that attempt to provide a competitiveadvantage over a particular time frame are called:
b. strategic decisions.
c. relevant decisions.
d. short-term decisions.
4. Which of the following is an example of adirect fixed cost?
a. Cost of a mold for a product
c. Cost of printing annual reports
d. Salary of a receptionist
10. Which of the following is true of targetpricing?
a. It aims to increase cost on redesigning the product duringthe production stage.
b. It requires the use of fewer materials, labor, and processesduring production, delivery and customer service.
c. It recognizes that only 50% of a product's cost becomescommitted by the time it reaches the design stage.
Budgets can be improved as performance measures by:
a. holding managers accountable for noncontrollable costs.
b. using fixed budgeting.
c. setting standards that are either too high or too low.
d. using participative budgeting.
_____ are an example of nonmonetary incentives used to enhance abudgetary control system.
a. Bonuses paid to managers
b. Salary increases to workers
c. Recognition programs
d. Promotions offered to supervisors
A decentralized organization is one in which:
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A local chain department store grants each of its store managersthe authority to make buying decisions for their stores. Grantingmanagers this kind of authority is found in which type oforganization?
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A local chain electronics store does not allow its store ordistrict managers to make important decisions about their stores.The main role of store managers is to supervise employees and makesure day-to-day transactions run smoothly while district managerssupervise store managers and report profitability data back totop-level management. Not allowing store or district managersdecision-making authority is most likely to be found in which typeof organization?
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When a few individuals at the top of an organization retaindecision-making authority, the organization is referred to asa(n):
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Which of the following statements regarding the structure oforganizations is false?
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Which of the following is an advantage of decentralization?
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Which of the following is not an advantage ofdecentralization?
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Which of the following is often not a disadvantage ofdecentralization?
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Which of the following is a disadvantage ofdecentralization?
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"Responsibility accounting" is the concept that says:
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A budget for a single unit of a product or service is called asa:
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Which of the following statements is true regarding the budgetedcost for direct materials?
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Variance analysis compares:
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Which of the following statements is false regarding taskanalysis?
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Task analysis:
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A(n) ____ is attainable only when near-perfect conditionsexist.
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In most companies, machines break down occasionally andemployees are often less than perfect. Which type of standardacknowledges these characteristics when determining the standardcost of a product?
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Hathaway Inc. produces and sells golf umbrellas to localresorts. Hathaway anticipates April to be a busy month with thesale of 2,000 umbrellas. The company has prepared the followingstatic budget for April:
Sales revenue (2,000 units) | $60,000 |
Variable costs: | |
Direct materials | 6,000 |
Direct labor | 8,000 |
Overhead | 2,500 |
Fixed costs | 6,000 |
Net operating income | $37,500 |
During April, Hathaway actually produced and sold 2,300 umbrellas.What should be Hathaway's net operating income in April based on aflexible budget?
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Hoppe Inc. manufactures widgets. Management has determined thateach widget has a standard materials cost of $3.50 when 2.5 ouncesof raw material at a cost of $1.40 per ounce are used. The staticbudget for the month of December showed an estimated production of4,000 widgets in December. During December, 4,300 widgets wereactually produced. The actual cost for each widget was $3.60 when2.25 ounces of raw material at a cost of $1.60 per ounce werepurchased and used. What should be the total direct materials costaccording to Hoppe's flexible budget for December?
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Violetta Inc. manufactures plastic storage boxes. Management hasdetermined that each medium-sized box has a standard materials costof $1.20 when 4 pounds of raw material at a cost of $.30 per poundare used. The static budget for the month of March showed anestimated production of 15,000 boxes in March. During March, 17,000boxes were actually produced. The actual cost for each box was$1.56 when 3.9 pounds of raw material at a cost of $.40 per poundwere purchased and used. What should be the total direct materialscost according to Violetta's flexible budget for March?
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