Question : 88.              At 18,000 direct labor hours, the flexible budget for : 1311868

 

 

88.              At 18,000 direct labor hours, the flexible budget for indirect materials is $36,000. If $37,400 are incurred at 18,400 direct labor hours, the flexible budget report should show the following difference for indirect materials:

a.$1,400 unfavorable.

b.$1,400 favorable.

c.$600 favorable.

d.$600 unfavorable.

 

 

89.              The accumulation of accounting data on the basis of the individual manager who has the authority to make day-to-day decisions about activities in an area is called

a.static reporting.

b.flexible accounting.

c.responsibility accounting.

d.master budgeting.

 

 

90.              Power Manufacturing recorded operating data for its shoe division for the year.

Sales$1,500,000

Contribution margin300,000

Controllable fixed costs180,000

Average total operating assets600,000

How much is controllable margin for the year?

a.20%

b.50%

c.$300,000

d.$120,000

 

 

91.              A cost is considered controllable at a given level of managerial responsibility if

a.the manager has the power to incur the cost within a given time period.

b.the cost has not exceeded the budget amount in the master budget.

c.it is a variable cost, but it is uncontrollable if it is a fixed cost.

d.it changes in magnitude in a flexible budget.

 

 

92.              As one moves up to each higher level of managerial responsibility,

a.fewer costs are controllable.

b.the responsibility for cost incurrence diminishes.

c.a greater number of costs are controllable.

d.performance evaluation becomes less important.

 

 

93.              A responsibility report should

a.be prepared in accordance with generally accepted accounting principles.

b.show only those costs that a manager can control.

c.only show variable costs.

d.only be prepared at the highest level of managerial responsibility.

 

 

94.              Top management can control

a.only controllable costs.

b.only noncontrollable costs.

c.all costs.

d.some noncontrollable costs and all controllable costs.

 

 

95.              Not-for-profit entities

a.do not use responsibility accounting.

b.utilize responsibility accounting in trying to maximize net income.

c.utilize responsibility accounting in trying to minimize the cost of providing services.

d.have only noncontrollable costs.

 

 

96.              Which of the following is not a true statement?

a.All costs are controllable at some level within a company.

b.Responsibility accounting applies to both profit and not-for-profit entities.

c.Fewer costs are controllable as one moves up to each higher level of managerial responsibility.

d.The term segment is sometimes used to identify areas of responsibility in decentralized operations.

 

 

97.              Costs incurred indirectly and allocated to a responsibility level are considered to be

a.nonmaterial.

b.mixed.

c.controllable.

d.noncontrollable.