The use of budgets in controlling operations is known as budgetary control
which one of the following is not part of the budgetary control process?
managers must use responsibility accounting
which statement is correct as it relates to budgetary control?
budgets contribute to the control of operations
budgetary control involves all of the following except
using static budgets
budget reports are prepared
all of the above answers (daily, weekly, monthly)
a production manager in a manufacturing company would most likely receive a
budgetary control involves
all of the above answers (developing, analyzing, corrective action)
a static budget report is appropriate for variable manufacturing costs
Ace Company monitors its managers performance using a static budget. Which one of the following situations will provide the fairest evaluation for those managers?
when the company performs at the same activity level as the static budget level
for which of the following costs is a static budget most appropriate
fixed overhead costs
a static budget is
a projection of budget data at a single level of activity
a static budget is useful in controlling costs when cost behavior is
a projection of budget data at one level of activity is a
a static budget report is appropriate for
fixed manufacturing costs and fixed selling & administrative expenses
a flexible budget projects budget data for one level of activity
the first step in developing a flexible budget is to identify the activity index and the relevant range of activity
management by exception means that top management will investigate every budget difference
what budgeted amounts appear on the flexible budget report?
budgeted amounts for the actual activity level achieved
which one of the following is a step that management must perform when developing the flexible budget?
identify the activity index and the relevant range of activity
at zero direct labor hours in a flexible budget graph, the total budgeted cost line intersects the vertical axis at $30,000. At 10,000 direct labor hours, a horizontal line drawn from the total budgeted cost line intersects the vertical axis at $90,000. Fixed and variable costs may be expressed as
$30,000 fixed plus $6 per direct labor hour variable
at 9,000 direct labor hours, the flexible budget for indirect materials is $27,000. If $28,000 of indirect materials costs are incurred at 9,200 direct labour hours, the flexible budget report should show the following difference for indirect materials
A projection of budget data for various levels of activity is a
which of the following steps is not taken by management when developing a flexible budget?
identify the fixed costs and determine the budgeted fixed cost per unit
In a flexible budget, a cost that would remain the same at each activity level is
In-Step Manufacturing uses a flexible budget. It has the following budgeted manufacturing costs for 25,000 pairs of shoes: Fixed Manufacturing Costs, $12,000 and Variable Manufacturing Costs, $16.00 per pair of shoes. If In-step Manufacturing makes 20,000 pairs of shoes this month, what are the total budgeted manufacturing cost for the month?
The processing department has monthly budgeted manufacturing overhead of $180,000 plus $3.00 per machine hour. If a flexible budget report shows $348,000 for total budgeted manufacturing overhead costs for the month, what was the actual level of activity achieved during the month?
56,000 machine hours
Costs incurred indirectly and allocated to a responsibility level are considered to be non-controllable at that level
Cost centers are usually either production departments or service departments
all of the following statements are correct about management by exception except it
means that top management has to investigate every budget difference
a company produces four reports in its responsibility reporting system, one for each level of management: department managers, plant managers, division managers, and the company vice president. Which statement is correct concerning the content of the respective reports?
the department manager sees a controllable costs of his or her respective department
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