chap 9 10 11

Question 1

is a detailed quantitative plan for
acquiring and using financial and other resources
over a specified forthcoming time period.

Answer 1

budget

Question 2

act of preparing a budget is

Answer 2

budgeting

Question 3

use of budgets to control an
organization’s activities

Answer 3

budgetary control

Question 4

involves developing
objectives and
preparing various
budgets to achieve
those objectives.

Answer 4

Planning

Question 5

involves the steps taken by
management to increase
the likelihood that the
objectives set down while
planning are attained and
that all parts of the
organization are working
together toward that goal.

Answer 5

CONTROL

Question 6

ordinarily cover a one-year period corresponding to a company’s fiscal year. Many companies divide their annual budget into four quarters.

Answer 6

Operating budgets

Question 7

is a 12-month budget that rolls
forward one month (or quarter)
as the current month (or quarter)
is completed.

Answer 7

continuous budget

Question 8

is a budget that is
prepared with the full cooperation and participation of managers
at all levels.

Answer 8

self-imposed budget or participative budget

Question 9

must be adequate to meet budgeted sales and to provide for the desired ending inventory.

Answer 9

production budget

Question 10

are benchmarks or “norms” for measuring performance.

Answer 10

standards

Question 11

specify how much of aninput should be used tomake a product orprovide a service

Answer 11

quantity standards

Question 12

specify how much should be paid for each unitof the input.

Answer 12

cost ( price ) standards

Question 13

Deviations from standard considered significant are brought to the attention of management, a practice known as

Answer 13

management by exception

Question 13

Often a singlerate is used that reflectsthe mix of wages earned.

Answer 13

RateStandards

Question 14

Use time and motion studies foreach labor operation.

Answer 14

TimeStandards

Question 15

The rate is the variable portion of the predetermined overhead rate.

Answer 15

RateStandards

Question 16

The activity is the base used to calculate the predetermined overhead.

Answer 16

ActivityStandards

Question 17

is set for total costs.

Answer 17

budget

Question 18

is a per unit cost, are often used when preparing budgets.

Answer 18

Standards

Question 19

Difference betweenactual price and standard price

Answer 19

price variance

Question 20

Difference betweenactual quantity andstandard quantity

Answer 20

quantity variance

Question 21

The actual price is used to compute the quantity variance so that the production manager is not held responsible forthe purchasing manager’s performance.

Answer 21

false

Question 22

Production managers areusually held accountablefor labor variances

Answer 22

true

Question 23

is the elapsed time from when a customer order is received to when the completed order is shipped.

Answer 23

Delivery cycle time

Question 24

is the amount of time required to turn raw materials into completed products. This includes process time, inspection time, move time, and queue time.

Answer 24

Throughput (manufacturing cycle) time

Question 25

are prepared fora single, plannedlevel of activity.

Answer 25

Static budgets

Question 26

Performance evaluation is difficult when actual activity differs from the planned level of activity.

Answer 26

true

Question 27

If flexible budgetis based onactual hoursOnly a spendingvariance can becomputed.

Answer 27

true

Question 28

If flexible budgetis based onstandard hours Both spendingand efficiencyvariances can be computed.

Answer 28

true

Question 29

Results from paying moreor less than expected foroverhead items and from excessive usage ofoverhead items.

Answer 29

spending variance

Question 30

Controlled bymanaging theoverhead cost driver.

Answer 30

efficiency variance

Question 31

, overhead isapplied to work inprocess based onthe actual numberof hours workedin the period.

Answer 31

normal cost system

Question 32

overhead isapplied to work inprocess based onthe standard hoursallowed for the outputof the period.

Answer 32

standard cost system

Question 33

Results from spendingmore or less thanexpected for fixedoverhead items.

Answer 33

budget variance

Question 34

Results when standard hoursallowed for actual output differsfrom the denominator activity

Answer 34

volume variance

Question 35

does not measure over- or under spending.It results from treating fixedoverhead as if it were avariable cost.

Answer 35

volume variance