1 POINT

3. BUDGETING VARIANCES DECENTRALIZEDOPERATIONS DIFFERENTIALANALYSIS COSTALLOCATION & ABC 1 POINT 1 POINT 1 POINT 1 POINT 1 POINT 2 POINTS 2POINTS 2POINTS 2 POINTS 2 POINTS 3 POINTS 3 POINTS 3 POINTS 3 POINTS 3 POINTS 4 POINTS 4 POINTS 4 POINTS 4 POINTS 4 POINTS 5 POINTS 5 POINTS 5 POINTS 5 POINTS 5 POINTS

4. 1 POINT THIS TYPE OF BUDGETING MAINTAINS A 12 MONTH PROJECTION INTO THE FUTURE

5. WHAT IS CONTINUOUS BUDGETING?

6. 2 POINTS ONCE A BUDGET HAS BEEN CREATED, THE TASK OF CO-ORDINATING OPERATIONS TO ACHIEVE THE BUDGET’S GOALS FALLS WITHIN THIS STEP OF THE MANAGEMENT CYCLE – LIGHTS, CAMERA, ACTION!

7. WHAT IS DIRECTING?

8. 3 POINTS THIS BUDGETARY APPROACH REQUIRES MANAGERS TO ESTIMATE SALES, PRODUCTION, AND OTHER OPERATING DATA AS THOUGH OPERATIONS WERE BEING STARTED FOR THE FIRST TIME

9. WHAT IS ZERO-BASED BUDGETING?

10. 4 POINTS • OF THE FOLLOWING, WHICH IS NOT A TYPE OF BUDGET DISCUSSED IN THE CHAPTER? • COST OF GOODS SOLD BUDGET • PRODUCTION BUDGET • VARIANCE BUDGET • DIRECT MATERIALS BUDGET • DIRECT LABOR BUDGET • FACTORY OVERHEAD BUDGET

11. WHAT IS A VARIANCE BUDGET?

12. 5 POINTS GIVEN THE FOLLOWING, THE AMOUNT OF CASH EXPECTED TO BE COLLECTED IN FEBRUARY: ACME PRODUCTS HAS THE FOLLOWING BUDGETED SALES FOR THE FIRST QUARTER, 2009: JANUARYFEBRUARYMARCH $1,000,000 $1,200,000 $900,000 10% OF EACH MONTH’S SALES ARE FOR CASH. OF THE REMAINING SALES, 60% ARE COLLECTED IN THE MONTH OF SALE, AND THE REMAINDER IN THE MONTH AFTER.

13. WHAT IS $1,128,000? FEBRUARY CASH SALES $1,200,000 * 10% $120,000 FEBRUARY CREDIT SALES COLLECTIONS$1,200,000 * 90% * 60% $648,000 JANUARY CREDIT SALES COLLECTIONS$1,000,000 * 90% * 40% $360,000 $1,128,000

14. 1 POINT THE VARIANCE COMPUTED BY THE FORMULA: (ACTUAL PRICE – STANDARD PRICE) * ACTUAL QUANTITY

15. WHAT IS THE DIRECT MATERIALS PRICE VARIANCE?

16. DAILY DOUBLE!

17. 2 POINTS THE TERM USED FOR ACCOUNTING SYSTEMS THAT USE PERFORMANCE GOALS FOR DIRECT MATERIALS, DIRECT LABOR, AND FACTORY OVERHEAD

18. WHAT ARE STANDARD COST SYSTEMS?

19. 3 POINTS THE TERM USED FOR STANDARDS THAT ARE ACHIEVED UNDER PERFECT OPERATING CONDITIONS – FOR EXAMPLE, NO MATERIALS SPOILAGE, NO IDLE TIME, NO BREAKDOWNS

20. WHAT ARE IDEAL STANDARDS?

21. 4 POINTS THE TERM USED WHEN A COMPANY MEASURES RESULTS SUCH AS CUSTOMER SATISFACTION

22. WHAT IS NON-FINANCIAL PERFORMANCE MEASURE?

23. 5 POINTS GIVEN THE FOLLOWING, THE AMOUNT (AND DIRECTION) OF THE FACTORY OVERHEAD VOLUME VARIANCE, GIVEN THAT FACTORY OVERHEAD IS APPLIED BASED ON DIRECT LABOR HOURS: ACTUAL COSTS:VARIABLE FACTORY OVERHEAD $10,400FIXED FACTORY OVERHEAD $12,000 STANDARD FIXED OVERHEAD RATE $2.40/dlhSTANDARD VARIABLE OVERHEAD RATE $3.60/dlh 100% OF NORMAL CAPACITY 5,000 dlhSTANDARD HRS @ ACTUAL PRODUCTION 4,000 dlh

24. WHAT IS $2,400 U? 100% OF NORMAL CAPACITY 5,000 dlhSTANDARD HRS @ ACTUAL PROD 4,000 dlhCAPACITY NOT USED 1,000 dlhSTANDARD FIXED OVERHEAD RATE * 2.40 / dlhVOLUME VARIANCE $2,400 U

25. 1 POINT IN THIS TYPE OF RESPONSIBILITY CENTER, THE MANAGER ONLY HAS THE RESPONSIBILITY AND AUTHORITY FOR CONTROLLING THE COSTS INCURRED

26. WHAT IS A COST CENTER?

27. 2 POINTS IN A PROFIT CENTER, THE RESPONSIBLE MANAGER’S PERFORMANCE REPORT INCLUDES NOT ONLY REVENUES AND OPERATING EXPENSES, BUT CHARGES FROM THESE INTERNAL ORGANIZATIONS

28. WHAT ARE SERVICE DEPARTMENTS?

29. 3 POINTS IN AN INVESTMENT CENTER, THE RESPONSIBLE MANAGER IS RESPONSIBLE FOR PROFITS, COSTS, AND THESE BALANCE SHEET ITEMS

30. WHAT ARE ASSETS?

31. 4 POINTS THE ANALYSIS FOR RETURN ON INVESTMENT CAN BE EXPANDED VIA A FORMULA, NAMED FOR THIS COMPANY THAT DEVELOPED NYLON IN 1935

32. WHAT IS DuPONT?

33. 5 POINTS THE NAMES OF THE TWO RATIOS IN THE EXPANDED ROI FORMULA

34. WHAT ARE PROFIT MARGIN AND INVESTMENT TURNOVER?

35. 1 POINT THIS TYPE OF COST IS NOT RELEVANT IN DIFFERENTIAL ANALYSIS, AND SOUNDS LIKE IT BELONGS IN A GAME OF “BATTLESHIP”

36. WHAT IS A SUNK COST?

37. 2 POINTS WHEN SETTING NORMAL PRODUCT SELLING PRICES, COMPANIES CAN CHOOSE BETWEEN COST-PLUS METHODS AND THESE?

38. WHAT ARE MARKET METHODS?

39. 3 POINTS IN THIS COST-PLUS METHOD, ONLY THE COSTS OF MANUFACTURING ARE INCLUDED IN THE COST AMOUNT TO WHICH THE MARKUP IS APPLIED

40. WHAT IS THE PRODUCT COST CONCEPT?

41. DAILY DOUBLE!

42. 4 POINTS THE TERM USED FOR THE AMOUNT OF INCOME FOREGONE FROM AN ALTERNATIVE USE OF AN ASSET

43. WHAT IS OPPORTUNITY COST?

44. 5 POINTS THE PRODUCT WHICH WILL MAXIMIZE INCOME UNDER THE FOLLOWING SCENARIO: STUDGEYSER BREWING MAKES THREE FERMENTED BEVERAGES: RED RIBBON, STALE ALE, AND COLT .47 THE FERMENTING PROCESS HAS LIMITED CAPACITY AND QUALIFIES AS A BOTTLENECK. RED RIBBONSTALE ALECOLT .47 SALES PRICE $20 $15 $30VARIABLE COST $10 $ 8 $15HOURS IN THEFERMENTER 5 7 10

45. WHAT IS RED RIBBON? RED RIBBONSTALE ALECOLT .47 SALES PRICE $20 $15 $30VARIABLE COST $10$ 8$15CONT. MARGIN $10 $ 7 $15HOURS IN THEFERMENTER ÷ 5÷7÷10 CM PER BOTTLE-NECK HOUR $2 $1 $1.50

46. 1 POINT THE THREE FACTORY OVERHEAD ALLOCATION METHODS ARE ACTIVITY-BASED COSTING, A SINGLE PLANTWIDE RATE, AND THIS

47. WHAT IS MULTIPLE PRODUCTION DEPARTMENT RATE?

48. 2 POINTS TERM USED FOR THE TYPE OF COSTING SYSTEM USED TO DETERMINE THE PROFITABILITY OF A MANUFACTURED ITEM

49. WHAT IS PRODUCT COSTING?

50. 3 POINTS USING A MULTIPLE PRODUCTION DEPARTMENT OR ACTIVITY-BASED COSTING RATE HELPS PREVENT THIS FROM OCCURRING