31) A sales forecast is _____. A. all of these answers are correct B. the same as a sales budget that will generate a desired level of sales C. the result of decisions to create conditions D. a prediction of sales under a given set of conditions
32) A _____ gives the expected sales under a given set of conditions. A. sales forecast B. budget forecast C. sales budget D. sales prediction
33) _____ models are mathematical models of the master budget that can react to any set of assumption about sales, costs, and product mix. A. Futuring B. Accounting C. Financial planning D. Budgeting analysis
34) Important factors considered by sales forecasters include all of the following except _____. A. marketing research studies B. competitors' activities C. the desired level of sales D. past patterns of sales
35) A _____ gives the expected sales under a given set of conditions. A. sales budget B. budget forecast C. sales forecast D. sales prediction
36) Unit sales of Product A are currently 10,000, while unit sales of Product B are double those of Product A. The com¬pany's sales forecast will be _____, assuming sales of Product A increase by 10% and those of Product B increase by 4,000 units. A. 11,000 and 22,000 units, respectively B. 11,000 and 24,000 units, respectively C. none of these answers is correct D. 10,000 and 20,000 units, respectively
37) _____ probably would not be used as a measure of activity in a flexible budget. A. Number of direct labor hours worked B. Number of machine hours used C. Number of hours worked by salespeople D. Sales volume
38) Differences between the static budget and the flexible budget are due to _____. A. poor usage of material and labor B. a combination of price and material variances C. actual activity differing from expected activity levels D. problems of cost control
39) _____ are components of a master budget. A. An operating budget and a financial budget B. A continuous budget and a static budget C. A cash budget and an activity budget D. A strategic plan and an operating budget
40) _____ is not a type of cost allocation. A. Reallocation of costs from service departments to production departments B. Allocation of costs of a particular organizational unit to products or services C. Reallocation of costs from production departments to service departments D. Allocation of costs to the appropriate organizational unit
41) Cost allocation base refers to the _____. A. cost objectives B. cost driver C. total allocated costs D. total costs to be allocated
42) The use of budgeted service department cost rates protects using departments from _____. A. all of these answers are correct B. service department efficiencies C. service outages D. price fluctuations
43) Gomez Company has two service departments, Maintenance and Personnel, as well as two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage while personnel costs are allocated based on number of employees. The following information has been gathered for the current year _____. Maintenance Personnel Mixing Finishing Direct dept. costs $126,000 $84,000 $105,000 $175,000 Square footage 800 400 1,600 1,200 Number of employees 8 12 24 32 If the step-down method is used to allocate costs and the Maintenance Department is allocated first, the amount of overhead that would be allocated from Maintenance to Mixing is: A. $36,000 B. $42,750 C. $42,000 D. $63,000
44) Kevin Company has two service departments, Maintenance and Personnel, as well as two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage while personnel costs are allocated based on number of employees. The following information has been gathered for the current year: Maintenance Personnel Mixing Finishing Direct dept. costs $126,000 $84,000 $105,000 $175,000 Square footage 800 400 1,600 1,200 Number of employees 8 12 24 32 If the step-down method of allocating costs is used and the Personnel Department is allocated first, then the amount of overhead that would be allocated from Personnel to Finishing is _____. A. $105,000 B. $42,000 C. $31,500 D. $72,000
45) Murphy Company has two service departments, Maintenance and Personnel, as well as two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage while personnel costs are allocated based on number of employees. The following information has been gathered for the current year: Maintenance Personnel Mixing Finishing Direct dept. costs $126,000 $84,000 $105,000 $175,000 Square footage 800 400 1,600 1,200 Number of employees 8 12 24 32 If the step-down method of allocating costs is used and the Personnel Department is allocated first, then the amount of overhead that would be allocated from Personnel to Mixing is _____. A. $78,000 B. $31,500 C. $63,000 D. $58,500
46) Absorption costing assigns _____ to the product. A. all fixed and variable costs B. variable manufacturing costs C. variable and fixed manufacturing costs D. all variable costs
47) _____ is another term for variable costing. A. Absorption costing B. Full costing C. Traditional costing D. Direct costing
48) _____ is (are) used for external reporting. A. Absorption costing and variable costing B. Absorption costing C. Direct costing D. Variable costing
49) _____ is the logical integration of management accounting tools to gather and report data and to evaluate performance. A. A management control system B. An internal control system C. A financial reporting system D. A quality control system
50) _____ is the first step in designing a management control system. A. Preparing financial statements B. Establishing organizational goals C. Distinguishing between profit centers and cost centers D. Evaluating management's performance
51) _____ is (are) the most basic component of a management control system. A. The stockholder's preferences B. The organization's goals C. Top management's preferences D. The organization's long-range budget
52) _____ is a measure of income or profit divided by the investment required to obtain that income or profit. A. Return on investment B. Capital turnover C. Residual income D. Return on sales
53) The following information is available for the Peter Company: Sales $150,000 Invested Capital 156,250 ROI 10% The return on sales is _____. A. 62.50% B. 10.42% C. none of these answers is correct D. 10.00%
54) The following information is available for the Peter Company: Sales $500,000 Invested Capital 312,500 ROI 10% The return on sales is _____. A. 1.000% B. 6.250% C. none of these answers is correct D. 10.000%
32) A _____ gives the expected sales under a given set of conditions. A. sales forecast B. budget forecast C. sales budget D. sales prediction
33) _____ models are mathematical models of the master budget that can react to any set of assumption about sales, costs, and product mix. A. Futuring B. Accounting C. Financial planning D. Budgeting analysis
34) Important factors considered by sales forecasters include all of the following except _____. A. marketing research studies B. competitors' activities C. the desired level of sales D. past patterns of sales
35) A _____ gives the expected sales under a given set of conditions. A. sales budget B. budget forecast C. sales forecast D. sales prediction
36) Unit sales of Product A are currently 10,000, while unit sales of Product B are double those of Product A. The com¬pany's sales forecast will be _____, assuming sales of Product A increase by 10% and those of Product B increase by 4,000 units. A. 11,000 and 22,000 units, respectively B. 11,000 and 24,000 units, respectively C. none of these answers is correct D. 10,000 and 20,000 units, respectively
37) _____ probably would not be used as a measure of activity in a flexible budget. A. Number of direct labor hours worked B. Number of machine hours used C. Number of hours worked by salespeople D. Sales volume
38) Differences between the static budget and the flexible budget are due to _____. A. poor usage of material and labor B. a combination of price and material variances C. actual activity differing from expected activity levels D. problems of cost control
39) _____ are components of a master budget. A. An operating budget and a financial budget B. A continuous budget and a static budget C. A cash budget and an activity budget D. A strategic plan and an operating budget
40) _____ is not a type of cost allocation. A. Reallocation of costs from service departments to production departments B. Allocation of costs of a particular organizational unit to products or services C. Reallocation of costs from production departments to service departments D. Allocation of costs to the appropriate organizational unit
41) Cost allocation base refers to the _____. A. cost objectives B. cost driver C. total allocated costs D. total costs to be allocated
42) The use of budgeted service department cost rates protects using departments from _____. A. all of these answers are correct B. service department efficiencies C. service outages D. price fluctuations
43) Gomez Company has two service departments, Maintenance and Personnel, as well as two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage while personnel costs are allocated based on number of employees. The following information has been gathered for the current year _____. Maintenance Personnel Mixing Finishing Direct dept. costs $126,000 $84,000 $105,000 $175,000 Square footage 800 400 1,600 1,200 Number of employees 8 12 24 32 If the step-down method is used to allocate costs and the Maintenance Department is allocated first, the amount of overhead that would be allocated from Maintenance to Mixing is: A. $36,000 B. $42,750 C. $42,000 D. $63,000
44) Kevin Company has two service departments, Maintenance and Personnel, as well as two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage while personnel costs are allocated based on number of employees. The following information has been gathered for the current year: Maintenance Personnel Mixing Finishing Direct dept. costs $126,000 $84,000 $105,000 $175,000 Square footage 800 400 1,600 1,200 Number of employees 8 12 24 32 If the step-down method of allocating costs is used and the Personnel Department is allocated first, then the amount of overhead that would be allocated from Personnel to Finishing is _____. A. $105,000 B. $42,000 C. $31,500 D. $72,000
45) Murphy Company has two service departments, Maintenance and Personnel, as well as two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage while personnel costs are allocated based on number of employees. The following information has been gathered for the current year: Maintenance Personnel Mixing Finishing Direct dept. costs $126,000 $84,000 $105,000 $175,000 Square footage 800 400 1,600 1,200 Number of employees 8 12 24 32 If the step-down method of allocating costs is used and the Personnel Department is allocated first, then the amount of overhead that would be allocated from Personnel to Mixing is _____. A. $78,000 B. $31,500 C. $63,000 D. $58,500
46) Absorption costing assigns _____ to the product. A. all fixed and variable costs B. variable manufacturing costs C. variable and fixed manufacturing costs D. all variable costs
47) _____ is another term for variable costing. A. Absorption costing B. Full costing C. Traditional costing D. Direct costing
48) _____ is (are) used for external reporting. A. Absorption costing and variable costing B. Absorption costing C. Direct costing D. Variable costing
49) _____ is the logical integration of management accounting tools to gather and report data and to evaluate performance. A. A management control system B. An internal control system C. A financial reporting system D. A quality control system
50) _____ is the first step in designing a management control system. A. Preparing financial statements B. Establishing organizational goals C. Distinguishing between profit centers and cost centers D. Evaluating management's performance
51) _____ is (are) the most basic component of a management control system. A. The stockholder's preferences B. The organization's goals C. Top management's preferences D. The organization's long-range budget
52) _____ is a measure of income or profit divided by the investment required to obtain that income or profit. A. Return on investment B. Capital turnover C. Residual income D. Return on sales
53) The following information is available for the Peter Company: Sales $150,000 Invested Capital 156,250 ROI 10% The return on sales is _____. A. 62.50% B. 10.42% C. none of these answers is correct D. 10.00%
54) The following information is available for the Peter Company: Sales $500,000 Invested Capital 312,500 ROI 10% The return on sales is _____. A. 1.000% B. 6.250% C. none of these answers is correct D. 10.000%
