Chapter 7 test bank with answers Horngren\'s Cost Accounting: A Managerial Emphasis, 16th Global Edition PDF

Preview

Summary

Cost Accounting: A Managerial Emphasis, 16e, Global Edition (Horngren)Chapter 7 Flexible Budgets, Direct-Cost Variances, andManagement Control7 Objective 7.1) A master budget is ____. A) a budget which starts from a zero base B) based on the level of expected output at the start of the budget period...

Description

Cost Accounting: A Managerial Emphasis, 16e, Global Edition (Horngren) Cha pt e r7 Fl e x i bl eBudge t s , Di r e c t Cos tVa r i a nc e s , a ndMa na ge me ntCont r ol 7 . 1 Obj e c t i ve7 . 1 1 )Ama s t e rbudge ti s_ __ _ __ _ _ . A)abudge twhi c hs t ar t sf r om az e r oba s e B)ba s e dont hel e ve lofe xpe c t e dout puta tt hes t ar toft hebudge tpe r i od C)de ve l ope da tt hee ndofape r i od D)at ypeoffle xi bl ebudge tonc ea c t ualr e s ul t sa r eknown Ans we r :B Di ff: 1 Obj e c t i ve :1 AACSB:Ana l yt i c a lt hi nki ng

2 )Ma na ge me ntb ye x c e pt i oni sapr a c t i c ewhe r e byma na ge r sf oc usmor ec l os e l yon__ _ _ __ _ _ . A)v ar i a nc e si nt hel a r ge rde pa r t me nt s B)a r e a snotope r a t i nga sant i c i pa t e da ndl e s sc l os e l yonar e ast ha tar eope r a t i nga sant i c i pa t e d C)a c t i vi t yba s e dbudge t i ng D)unf a vor a bl evar i a nc e s Ans we r :B Di ff: 1 Obj e c t i ve :1 AACSB:Ana l yt i c a lt hi nki ng

3 )Ava r i anc ei s__ _ _ __ _ _. A)t hedi ffe r e nc ebe t we e nac t ualfix e dc os tpe runi ta nds t anda r dva r i a bl ec os tpe runi t B)t hes t anda r duni t sofi nput sf oroneout put C)t hedi ffe r e nc ebe t we e na na c t ualr e s ul ta ndabudge t e dpe r f or ma nc e D)t hedi ffe r e nc ebe t we e nac t ualv ar i a bl ec os tpe runi ta nds t a ndar dfix e dc os tpe runi t Ans we r :C Di ff: 1 Obj e c t i ve :1 AACSB:Ana l yt i c a lt hi nki ng

4 )Anunf a vor abl eva r i a nc ei ndi c a t e st ha t_ __ _ __ _ _ . A)t hea c t ua lc os t sa r el e s st ha nt hebudge t e dc os t s B)t hea c t ua lr e ve nue se x c e e dt hebudge t e dr e ve nue s C)t heac t ualuni t ss ol da r el e s st hant hebudge t e duni t s D)t hebudge t e dc ont r i but i onma r gi ni smor et ha nt hea c t ualamount Ans we r :C Di ff: 2 Obj e c t i ve :1 AACSB:Ana l yt i c a lt hi nki ng

1 Copyright © 2018 Pearson Education, Ltd.

5 )Af a vor a bl evar i a nc ei ndi c a t e st ha t_ __ _ __ _ _ . A)budge t e dc os t sar el e s st hanac t ualc os t s B)a c t ualr e ve nue se x c e e dbudge t e dr e ve nue s C)a c t ua lope r a t i ngi nc omei sl e s st hant hebudge t e da mount D)budge t e dc ont r i but i onma r gi ni smor et ha nt hea c t uala mount Ans we r :B Di ff: 2 Obj e c t i ve :1 AACSB:Ana l yt i c a lt hi nki ng

6 )Li nc ol nCor por a t i onus e dt hef ol l owi ngda t at oe va l ua t et he i rc ur r e ntope r a t i ngs ys t e m.Thec ompa ny s e l l si t e msf or$ 19e a c ha ndus e dabudge t e ds e l l i ngpr i c eof$ 1 9pe runi t .

Uni t ss ol d Va r i a bl ec os t s Fi x e dc os t s

Ac t ua l 4 8 , 0 0 0uni t s $ 1 67 , 00 0 $ 4 1, 0 00

Budge t ed 3 9 , 0 0 0uni t s $ 1 52 , 00 0 $ 5 0, 0 00

Wha ti st hes t a t i c budge tvar i a nc eofr e ve nue s ? A)$ 17 1 , 0 0 0f a vor a bl e B)$ 1 7 1, 0 00unf a vor a bl e C)$ 6, 0 00f a vor abl e D)$ 9, 0 00unf a vor a bl e Ans we r :A Expl a na t i on:St a t i c budge tvar i a nc eofr e ve nue s=( 4 8, 0 00uni t s×$ 1 9)-( 3 9, 0 00uni t s×$ 1 9 )=$1 7 1, 0 00F Di ff: 2 Obj e c t i ve :1 AACSB:Appl i c a t i onofknowl e dge

7 )Li nc ol nCor por a t i onus e dt hef ol l owi ngda t at oe va l ua t et he i rc ur r e ntope r a t i ngs ys t e m.Thec ompa ny s e l l si t e msf or$ 18e a c ha ndus e dabudge t e ds e l l i ngpr i c eof$ 1 8pe runi t .

Uni t ss ol d Va r i a bl ec os t s Fi x e dc os t s

Ac t ua l 4 5 , 0 0 0uni t s $ 1 61 , 00 0 $ 4 4, 0 00

Budge t ed 3 1 , 0 0 0uni t s $ 1 50 , 00 0 $ 5 0, 0 00

Wha ti st hes t a t i c budge tvar i a nc eofva r i abl ec os t s ? A)$ 6, 0 00f a vor a bl e B)$ 1 1 , 0 0 0unf a vor abl e C)$ 14 , 00 0f a v or a bl e D)$ 5, 0 00unf a vor a bl e Ans we r :B Expl a na t i on:St a t i c budge tvar i a nc eofva r i a bl ec os t s=$ 1 61 , 00 0−$ 15 0 , 0 0 0=$1 1 , 0 00U Di ff: 2 Obj e c t i ve :1 AACSB:Appl i c a t i onofknowl e dge

2 Copyright © 2018 Pearson Education, Ltd.

8 )Li nc ol nCor por a t i onus e dt hef ol l owi ngda t at oe va l ua t et he i rc ur r e ntope r a t i ngs ys t e m.Thec ompa ny s e l l si t e msf or$ 18e a c ha ndus e dabudge t e ds e l l i ngpr i c eof$ 1 8pe runi t .

Uni t ss ol d Va r i a bl ec os t s Fi x e dc os t s

Ac t ua l 4 3 , 0 0 0uni t s $ 1 66 , 00 0 $ 4 1, 0 00

Budge t ed 3 3 , 0 0 0uni t s $ 1 50 , 00 0 $ 5 8, 0 00

Wha ti st hes t a t i c budge tvar i a nc eofope r a t i ngi nc ome ? A)$ 16 4 , 0 0 0f a vor a bl e B)$ 1 6 4, 0 00unf a vor a bl e C)$ 18 1 , 0 0 0f a vor a bl e D)$ 18 1 , 0 0 0unf a vor a bl e Ans we r :C Expl a na t i on: Ac t ua l St a t i c St a t i c budge t Re s ul t s Budge t Var i a nc e Uni t ss ol d 4 3 , 0 0 0 3 3 , 0 0 0 Re ve nue s $ 7 74 , 00 0 Va r i a bl ec os t s 1 6 6, 0 00 Cont r i but i onma r gi n $ 6 08 , 00 0 Fi x e dc os t s 4 1 , 0 0 0 Ope r a t i ngi nc ome $ 5 67 , 00 0

$ 59 4 , 0 00 1 5 0, 0 00 $ 4 44 , 00 0 5 8 , 0 0 0 $ 3 86 , 00 0

$ 1 8 0, 0 00 F 1 6, 0 00 U 1 64 , 00 0 F $1 7 , 0 0 0 F $ 1 81 , 00 0F

Di ff: 3 Obj e c t i ve :1 AACSB:Appl i c a t i onofknowl e dge

9 )Sc hoone rCor por a t i onus e dt hef ol l owi ngda t at oe va l ua t ei t sc ur r e ntope r a t i ngs ys t e m.Thec ompa ny s e l l si t e msf or$ 23e a c ha ndus e dabudge t e ds e l l i ngpr i c eof$ 2 3pe runi t .

Uni t ss ol d Va r i a bl ec os t s Fi x e dc os t s

Ac t ua l Budge t ed 1 7 1, 0 00uni t s 1 8 7, 0 00uni t s $ 1 , 0 8 1, 0 00 $ 1 , 2 8 5, 0 00 $ 8 00 , 00 0 $ 7 74 , 00 0

Wha ti st hes t a t i c budge tvar i a nc eofr e ve nue s ? A)$ 36 8 , 0 0 0f a vor a bl e B)$ 3 6 8, 0 00unf a vor a bl e C)$ 16 , 00 0f a v or a bl e D)$ 16 , 00 0unf a vor a bl e Ans we r :B Expl a na t i on:St a t i c budge tvar i a nc eofr e ve nue s=( 1 71 , 00 0uni t s×$ 23 )−( 1 87 , 00 0uni t s×$ 2 3 )=$3 6 8 , 0 0 0 U Di ff: 2 Obj e c t i ve :1 AACSB:Appl i c a t i onofknowl e dge

3 Copyright © 2018 Pearson Education, Ltd.

1 0 )Sc hoone rCor por a t i onus e dt hef ol l owi ngda t at oe va l ua t ei t sc ur r e ntope r a t i ngs ys t e m.Thec ompa ny s e l l si t e msf or$ 25e a c ha ndus e dabudge t e ds e l l i ngpr i c eof$ 2 5pe runi t .

Uni t ss ol d Va r i a bl ec os t s Fi x e dc os t s

Ac t ua l Budge t ed 1 7 3, 0 00uni t s 1 8 1, 0 00uni t s $ 1 , 0 8 1, 0 00 $ 1 , 2 8 5, 0 00 $ 8 06 , 00 0 $ 7 70 , 00 0

Wha ti st hes t a t i c budge tvar i a nc eofva r i abl ec os t s ? A)$ 36 , 00 0f a vor abl e B)$ 3 6 , 0 0 0unf a vor abl e C)$ 20 4 , 0 0 0f a vor a bl e D)$ 20 4 , 0 0 0unf a vor a bl e Ans we r :C Expl a na t i on:St a t i c budge tvar i a nc eofva r i a bl ec os t s=$ 1 , 0 8 1 , 0 0 0−$1 , 28 5 , 0 0 0=$2 0 4 , 0 0 0F Di ff: 2 Obj e c t i ve :1 AACSB:Appl i c a t i onofknowl e dge

1 1 )Sc hoone rCor por a t i onus e dt hef ol l owi ngda t at oe va l ua t ei t sc ur r e ntope r a t i ngs ys t e m.Thec ompa ny s e l l si t e msf or$ 24e a c ha ndus e dabudge t e ds e l l i ngpr i c eof$ 2 4pe runi t .

Uni t ss ol d Va r i a bl ec os t s Fi x e dc os t s

Ac t ua l Budge t ed 1 7 7, 0 00uni t s 1 8 4, 0 00uni t s $ 1 , 0 9 0, 0 00 $ 1 , 2 9 0, 0 00 $ 8 04 , 00 0 $ 7 80 , 00 0

Wha ti st hes t a t i c budge tvar i a nc eofope r a t i ngi nc ome ? A)$ 8, 0 00f a vor a bl e B)$ 1 7 6, 0 00unf a vor a bl e C)$ 32 , 00 0f a v or a bl e D)$ 7, 0 00unf a vor a bl e Ans we r :A Expl a na t i on: Ac t ua l St a t i c St a t i c budge t Re s ul t s Budge t Var i a nc e Uni t ss ol d 1 7 7, 0 00 1 8 4, 0 00 Re ve nue s $ 4 , 2 4 8, 0 00 Va r i a bl ec os t s 1 , 0 90 , 00 0 Cont r i but i onma r gi n$ 3 , 1 5 8, 0 00 Fi x e dc os t s 8 0 4, 0 00 Ope r a t i ngi nc ome $ 2 , 3 5 4, 0 00

$ 4 , 4 1 6, 0 00 1 , 2 90 , 00 0 $ 3 , 1 2 6, 0 00 7 8 0, 0 00 $ 2 , 3 4 6, 0 00

$ ( 1 6 8, 0 00 )U ( 20 0 , 0 0 0 )F 3 2 , 0 0 0F 2 4, 0 00 U $ 8 , 0 0 0F

Di ff: 3 Obj e c t i ve :1 AACSB:Appl i c a t i onofknowl e dge

4 Copyright © 2018 Pearson Education, Ltd.

1 2 )Da ni e l sCor por a t i onus e dt hef ol l owi ngda t at oe va l ua t et he i rc ur r e ntope r a t i ngs ys t e m.Thec ompany s e l l si t e msf or$ 19e a c ha ndha dus e dabudge t e ds e l l i ngpr i c eof$2 0pe runi t .

Uni t ss ol d Va r i a bl ec os t s Fi x e dc os t s

Ac t ua l Budge t ed 2 8 0, 0 00uni t s 2 7 9, 0 00uni t s $ 9 80 , 00 0 $ 8 81 , 00 0 $ 5 8, 0 00 $ 4 5, 0 00

Wha ti st hes t a t i c budge tvar i a nc eofr e ve nue s ? A)$ 29 9 , 0 0 0f a vor a bl e B)$ 2 6 0, 0 00f a vor a bl e C)$ 26 0 , 0 0 0unf a vor a bl e D)$ 29 9 , 0 0 0unf a vor a bl e Ans we r :C Expl a na t i on:St a t i c budge tvar i a nc eofr e ve nue s=( 2 80 , 00 0uni t s×$ 19 )−( 2 79 , 00 0uni t s×$ 2 0 )=$2 6 0 , 0 0 0 U Di ff: 2 Obj e c t i ve :1 AACSB:Appl i c a t i onofknowl e dge

1 3 )Da ni e l sCor por a t i onus e dt hef ol l owi ngda t at oe va l ua t et he i rc ur r e ntope r a t i ngs ys t e m.Thec ompany s e l l si t e msf or$ 19e a c ha ndha dus e dabudge t e ds e l l i ngpr i c eof$2 0pe runi t .

Uni t ss ol d Va r i a bl ec os t s Fi x e dc os t s

Ac t ua l Budge t ed 2 8 0, 0 00uni t s 2 7 0, 0 00uni t s $ 9 90 , 00 0 $ 8 87 , 00 0 $ 6 0, 0 00 $ 4 7, 0 00

Wha ti st hes t a t i c budge tvar i a nc eofva r i abl ec os t s ? A)$ 11 6 , 0 0 0f a vor a bl e B)$ 1 1 6, 0 00unf a vor a bl e C)$ 10 3 , 0 0 0f a vor a bl e D)$ 10 3 , 0 0 0unf a vor a bl e Ans we r :D Expl a na t i on:St a t i c budge tvar i a nc eofva r i a bl ec os t s=$ 9 90 , 00 0−$ 88 7 , 0 0 0=$1 0 3 , 0 0 0U Di ff: 2 Obj e c t i ve :1 AACSB:Appl i c a t i onofknowl e dge

5 Copyright © 2018 Pearson Education, Ltd.

1 4 )Da ni e l sCor por a t i onus e dt hef ol l owi ngda t at oe va l ua t et he i rc ur r e ntope r a t i ngs ys t e m.Thec ompany s e l l si t e msf or$ 18e a c ha ndha dus e dabudge t e ds e l l i ngpr i c eof$1 9pe runi t .

Uni t ss ol d Va r i a bl ec os t s Fi x e dc os t s

Ac t ua l Budge t ed 2 8 0, 0 00uni t s 2 7 8, 0 00uni t s $ 9 60 , 00 0 $ 8 86 , 00 0 $ 6 0, 0 00 $ 5 1, 0 00

Wha ti st hes t a t i c budge tvar i a nc eofope r a t i ngi nc ome ? A)$ 32 5 , 0 0 0f a vor a bl e B)$ 3 2 5, 0 00unf a vor a bl e C)$ 31 6 , 0 0 0f a vor a bl e D)$ 31 6 , 0 0 0unf a vor a bl e Ans we r :B Expl a na t i on: Ac t ua l St a t i c St a t i c budge t Re s ul t s Budge t Var i a nc e Uni t ss ol d 2 8 0, 0 00 2 7 8, 0 00 Re ve nue s $ 5 , 0 4 0, 0 00 Va r i a bl ec os t s 9 6 0, 0 00 Cont r i but i onma r gi n $4 , 0 80 , 00 0 Fi x e dc os t s 6 0 , 0 0 0 Ope r a t i ngi nc ome $ 4 , 0 2 0, 0 00

$ 5 , 2 8 2, 0 00 8 8 6, 0 00 $4 , 39 6 , 0 00 5 1 , 0 0 0 $ 4 , 3 4 5, 0 00

$ ( 2 4 2, 0 00 )U ( 74 , 00 0 )U 3 16 , 0 00 U 9 , 0 00 U $ 32 5 , 0 0 0U

Di ff: 3 Obj e c t i ve :1 AACSB:Appl i c a t i onofknowl e dge

1 5 )J ohns onCompa nyha dpl anne df orope r a t i ngi nc omeof$ 1 0mi l l i oni nt hema s t e rbudge twi t ha c ont r i but i onmar gi nof$ 3mi l l i on,butac t ual l ya c hi e ve dope r a t i ngi nc omeofonl y$ 7mi l l i ona nda c ont r i but i onmar gi nof$ 2. 5mi l l i on. A)Thes t a t i c budge tv ar i a nc ef orope r a t i ngi nc omei s$ 3mi l l i onf a vor abl e . B)Thes t a t i c budge tva r i anc ef orope r a t i ngi nc omei s$ 3mi l l i onunf a vor a bl e . C)Thefle xi bl e budge tva r i a nc ef orope r a t i ngi nc omei s$ 3mi l l i onf a vor abl e . D)Thefle xi bl e budge tv ar i a nc ef orope r a t i ngi nc omei s$ 3mi l l i onunf a vor a bl e . Ans we r :B Di ff: 2 Obj e c t i ve :1 AACSB:Ana l yt i c a lt hi nki ng

1 6 )A mas t e rbudge ti sc a l l e das t a t i cbudge tbe c a us ei ti sde ve l ope da r oundas i ngl epl a nne dout putl e ve l . Ans we r :TRUE Di ff: 1 Obj e c t i ve :1 AACSB:Ana l yt i c a lt hi nki ng

6 Copyright © 2018 Pearson Education, Ltd.

1 7 )Forr e ve nuei t e ms ,af a vor a bl eva r i anc eme a nst ha ta c t ualr e ve nue sar el e s st ha ne x pe c t e d. Ans we r :F ALSE Expl a na t i on:Fa vor a bl eme a nst her e ve nue swe r emor et hane xpe c t e d( budge t e dr e ve nue s ) Di ff: 2 Obj e c t i ve :1 AACSB:Appl i c a t i onofknowl e dge

1 8 )A v ar i a nc ei st hedi ffe r e nc ebe t we e nt heac t ualc os tf ort hec ur r e nta nde xpe c t e d( orbudge t e d) pe r f or manc e . Ans we r :TRUE Di ff: 2 Obj e c t i ve :1 AACSB:Ana l yt i c a lt hi nki ng

1 9 )A f a vor a bl ee xpe ns eva r i a nc er e s ul t swhe na c t ualc os t se x c e e dbudge t e dc os t s . Ans we r :F ALSE Expl a na t i on:A f a vor abl eva r i a nc er e s ul t swhe na c t ualc os t sar el e s st ha nbudge t e dc os t s . Di ff: 2 Obj e c t i ve :1 AACSB:Ana l yt i c a lt hi nki ng

2 0 )Mana ge me ntb ye x c e pt i oni st hepr a c t i c eofc onc e nt r a t i ngona r e a snotope r a t i nga sant i c i pa t e d( s uc h a sac os to ve r r un)a ndpl ac i ngl e s sa t t e nt i onona r e asope r a t i nga sa nt i c i pa t e d. Ans we r :TRUE Di ff: 1 Obj e c t i ve :1 AACSB:Ana l yt i c a lt hi nki ng

2 1 )A f a vor a bl evar i anc ei ndi c a t e st ha tbudge t e dc os t sa r el e s st ha na c t ualc os t s . Ans we r :F ALSE Expl a na t i on:A f a vor abl eva r i a nc ei ndi c a t e st ha tbudge t e dc os t sa r egr e a t e rt ha na c t ualc os t s . Di ff: 2 Obj e c t i ve :1 AACSB:Ana l yt i c a lt hi nki ng

2 2 )A f a vor a bl evar i anc es houl dbei gnor e dbymana ge me nt . Ans we r :F ALSE Expl a na t i on:Fa vor a bl evar i a nc ei nve s t i ga t i onma yl e a dt oi mpr ove dpr oduc t i onme t hods ,ot he r di s c ove r i e sf orf ut ur eoppor t uni t i e s ,ornotbegoodne wsa ta l la nda dve r s e l ya ffe c tot he rvar i a nc e s . Di ff: 1 Obj e c t i ve :1 AACSB:Ana l yt i c a lt hi nki ng

2 3 )Va r i a nc e sa r eus e df ore va l ua t i ngpe r f or ma nc ea ndf ormot i v a t i ngmana ge r s . Ans we r :TRUE Di ff: 2 Obj e c t i ve :1 AACSB:Ana l yt i c a lt hi nki ng

7 Copyright © 2018 Pearson Education, Ltd.

2 4 )St a t i c budge tva r i a nc ef orope r a t i ngi nc omei sc al c ul a t e dbyt a ki ngadi ffe r e nc ebe t we e ns t a t i c budge t ope r a t i ngi nc omea nda c t ua lope r a t i ngi nc ome . Ans we r :TRUE Di ff: 2 Obj e c t i ve :1 AACSB:Ana l yt i c a lt hi nki ng

2 5 )Expl a i nt hedi ffe r e nc ebe t we e nas t a t i cbudge ta ndafle xi bl ebudge t .Expl a i nwha ti sme a ntbyas t a t i c budge tva r i anc eandafle xi bl ebudge tvar i a nc e . Ans we r :A s t a t i cbudge ti soneba s e dont hel e ve lofout putpl a nne da tt hes t ar toft hebudge tpe r i od.A fle xi bl ebudge tc a l c ul a t e sbudge t e dr e ve nueandbudge t e dc os t sba s e dont hea c t ualout puti nt hebudge t pe r i od.Theonl ydi ffe r e nc ebe t we e nt hes t a t i cbudge ta ndt hefle xi bl ebudge ti st ha tt hes t a t i cbudge ti s pr e pa r e df ort hepl a nne dout put ,whe r e a st hefle xi bl ebudge ti spr e par e dba s e dont hea c t ualout put . As t a t i cbudge tvar i a nc ei st hedi ffe r e nc ebe t we e nt hea c t ualr e s ul t sa ndt hec or r e s pondi ngbudge t e d a mount si nt hes t a t i cbudge t .Afle x i bl e budge tva r i a nc ei st hedi ffe r e nc ebe t we e na na c t ualr e s ul ta ndt he c or r e s pondi ngfle xi bl e budge tamountba s e dont hea c t ualout puti nt hebudge tpe r i od. Di ff: 2 Obj e c t i ve :1 AACSB:Ana l yt i c a lt hi nki ng

7 . 2 Obj e c t i ve7 . 2 1 )Thefle xi bl ebudge tc ont a i ns_ _ _ __ _ _ _. A)budge t e da mount sf ora c t ualout put B)s t a t i cbudge tamount sf orpl a nne dout put C)a c t ua lc os t sf ora c t ualout put D)a c t ualc os t sf orpl a nne dout put Ans we r :A Di ff: 1 Obj e c t i ve :2 AACSB:Ana l yt i c a lt hi nki ng

2 )Whi c hoft hef ol l owi ngi t e mswi l lbes amef orafle xi bl ebudge ta ndamas t e rbudge t ? A)t ot a lva r i a bl ec os t B)t ot ale xpe c t e dfix e dc os t s C)t ot a lc ont r i but i onma r gi n D)t ot a le xpe c t e dr e ve nue s Ans we r :B Di ff: 2 Obj e c t i ve :2 AACSB:Ana l yt i c a lt hi nki ng

8 Copyright © 2018 Pearson Education, Ltd.

3 )Afle xi bl ebudge t_ _ __ _ _ __ . A)i sa not he rna mef ormana ge me ntb ye x c e pt i on B)i sde ve l ope da tt hee ndoft hepe r i od C)i sba s e dont hebudge t e dl e ve lofout put D)pr o vi de sf a vor a bl eope r a t i ngr e s ul t s Ans we r :B Di ff: 1 Obj e c t i ve :2 AACSB:Ana l yt i c a lt hi nki ng

4 )Ac ompanybudge t s10 , 00 0uni t sofs al e sba s e donapr oj e c t e ds e l l i ngpr i c eof$ 1 3. 0 0. Theac t ualuni t s s ol dwe r e1 5 , 0 0 0a tapr i c eof$1 0 .Wha ti st hefle xi bl ebudge tf ors a l e s ? A)$ 19 5 , 0 0 0 B)$ 1 5 0, 0 00 C)$ 13 0 , 0 0 0 D)$ 10 0 , 0 0 0 Ans we r :A Expl a na t i on:1 5, 0 00x$ 13 Di ff: 2 Obj e c t i ve :2 AACSB:Ana l yt i c a lt hi nki ng

5 )Anunf a vor abl efle xi bl e budge tvar i a nc ef orvar i a bl ec os t sma ybet her e s ul tof_ _ __ _ _ __ . A)us i ngmor ei nputqua nt i t i e st ha nwe r ebudge t e d B)pa yi ngl owe rpr i c e sf ori nput st ha nwe r ebudge t e d C)s e l l i ngout puta tahi ghe rs e l l i ngpr i c et ha nbudge t e d D)s e l l i ngl e s squa nt i t yc ompa r e dt ot hebudge t e d Ans we r :A Di ff: 3 Obj e c t i ve :2 AACSB:Ana l yt i c a lt hi nki ng

6 )I nafle xi bl ebudge t_ _ __ _ _ __ . A)v ar i a bl ec os t sa r ec a l c ul a t e dpr opor t i ona t e l yf ort hebudge t e dl e ve lofs a l e s B)fix e dc os t sa r ec al c ul a t e dpr opor t i ona t e l yf ort hea c t ua ll e ve lofs a l e s C)fix e dc os t sar eke pta tt hes a mel e ve lofs t a t i cbudge t D)v ar i a bl ec os t sar eke pta tt hes a mel e ve lofs t a t i cbudge t Ans we r :C Di ff: 2 Obj e c t i ve :2 AACSB:Ana l yt i c a lt hi nki ng

9 Copyright © 2018 Pearson Education, Ltd.

7 )Whi c hoft hef ol l owi ngi nf or ma t i oni sne e de dt opr e pa r eafle xi bl ebudge t ? A)a c t ualuni t ss ol d B)a c t ualv ar i a bl ec os t C)a c t ua ls e l l i ngpr i c epe runi t D)a c t ualfix e dc os t Ans we r :A Di ff: 3 Obj e c t i ve :2 AACSB:Ana l yt i c a lt hi nki ng

8 )Whi c hoft hef ol l owi ngi st r ueoffle xi bl ebudge t ? A)I tc a l c ul a t e st ot alv ar i a bl ec os tb ymul t i pl yi nga c t ualuni t sbybudge t e dva r i a bl ec os tpe runi t . B)I tc al c ul a t e st ot alfix e dc os tbymul t i pl yi nga c t ua luni t sbybudge t e dfix e dc os tpe runi t . C)I tc a l c ul a t e sr e ve nue sbymul t i pl yi ngbudge t e duni t sbya c t uals e l l i ngpr i c epe runi t . D)I tc a l c ul a t e sc ont r i but i onmar gi nb ymul t i pl yi ngbudge t e duni t sbya c t ua lc ont r i but i onmar gi npe r uni t . Ans we r :A Di ff: 2 Obj e c t i ve :2 AACSB:Ana l yt i c a lt hi nki ng

9 )Afle xi bl e budge tv ar i a nc ei s$ 60 0f a v or a bl ef oruni t r e l a t e dc os t s .Thi si ndi c a t e st ha tc os t swe r e _ _ __ _ __ _ . A)$ 60 0mor et ha nt hema s t e rbudge t B)$ 6 0 0l e s st ha nf ort hepl a nne dl e ve lofac t i vi t y C)$ 60 0mor et ha ns t anda r df ort hea c hi e ve dl e ve lofa c t i vi t y D)$ 60 0l e s st ha ns t anda r df ort hea c hi e ve dl e ve lofa c t i vi t y Ans we r :D Di ff: 2 Obj e c t i ve :2 AACSB:Ana l yt i c a lt hi nki ng

1 0 )Gooda r dI nc .pl a nne dt ous e$ 15 3ofma t e r i alpe runi tbuta c t ua l l yus e d$ 14 0ofma t e r i a lpe runi t ,a nd pl a nne dt oma ke1, 1 00uni t sbutac t ual l yma de9 40uni t s . Thefle xi bl e budge ta mountf orma t e r i a l si s_ _ __ _ _ __ . A)$ 16 8 , 3 0 0 B)$ 1 4 3, 8 20 C)$ 15 4 , 0 0 0 D)$ 13 1 , 6 0 0 Ans we r :B Expl a na t i on:9 40uni t s×$ 1 53=$ 1 4 3, 8 20 Di ff: 2 Obj e c t i ve :2 AACSB:Appl i c a t i onofknowl e dge

10 Copyright © 2018 Pearson Education, Ltd.

1 1 )Gooda r dI nc .pl a nne dt ous e$ 15 6ofma t e r i alpe runi tbuta c t ua l l yus e d$ 14 1ofma t e r i a lpe runi t ,a nd pl a nne dt oma ke1, 1 50uni t sbutac t ual l ...