What is the sequence of steps in preparing the master budget? I think it is B is that correct? 

a) Output from the financial budget is used to prepare the budgeted income statement?
b) Output from the operating budget is used to prepare the financial budget?
c) Output from the financial budget is used to prepare the operating expense budget?
d) Output from the financial budget is used to prepare the operating budget?

Jensen Company is preparing a cash budget for the month of June. The minimum cash balance desired is $10,000 – what is the net cash receipts and disbursements for  the month of June given the following? I think it is $12,000 – is that correct?

Cash Balance = $10,000 (May 31)
Cash Collections from Customers in June = $76,000

Cash paid for merchandise in June = $42,000

Paid operating expenses in June = $17,000
Purchase Furniture for cash in June = $5,000

Depreciation expenses in June = $2,000

Amortization expenses in June = $3,000

Which is NOT a reason for a static budget variance? I think it is C – is that correct

a) Actual variance costs were higher than static budget variance cost

b) Actual sales volume was higher than projected sales volume

c) Actual fixed costs where higher than static budget fixed costs 

d) Actual sales volume is current period was higher than projected sales volume in last period

In which of the following scenarios can Eastman Company NOT have a favorable flexible budget variance for direct materials? When direct material price variance is __________ and when direct material quantity variance is ________. Is A correct?

a) unfavorable, unfavorable

b) unfavorable, favorable 

c) favorable, favorable

d) favorable, unfavorable

What is a balanced scorecard? I think this is B but i have no clue on the second part!

a) A logical integration of techniques to gather and use information to make planning and control decisions, to motivate employee behavior, and to evaluate performance.

b) A performance report that contains measures of all the key financial and nonfinancial variables that are important for a company to prosper.

c) A measurement technique that focuses on prevention of defects and on achievement of customer satisfaction.

d) A characteristic or attribute that must be achieved in order to drive the organization towards its goals.  

Why are more companies using a balanced scorecard?

• a) Companies find that it compares profit to investment using measures such as return on investment or residual income.
• b) Companies find that it is a useful tool to help managers focus on the multidimensional factors that make an organization successful.
• c) Companies find that it facilitates forecasting and budgeting and communicates results of actions across the organization.
• d) Companies find that it  builds on the assumption that an organization minimizes the cost of quality  when it achieves high quality levels.

Which of the following statements about management control systems is FALSE? NOT SURE

• a) The design of a management control system should consider the responsibilities of managers and the amount of autonomy they have.
• b) Profit −center managers always have more decentralized decision −making authority than cost − center managers.
• c) The management control system should be designed to achieve the best possible alignment between managerial effort and goal congruence.
• d) In designing management  control systems, top managers must consider the system’s impact on  the employee behavior desired by the organization.

How does economic profit differ from net income? Is B Correct? 

a) The major difference is that net income includes a capital charge, that is, a cost of using all capital. In contrast, economic profit includes a charge for using debt capital (interest) but no charge for using equity capital. Some measures of economic profit rely primarily on financial reporting numbers and others, such as EVA, include adjustments such as deducting cash taxes rather than tax expense or capitalizing rather than expensing R&D.

b) The major difference is that economic profit includes a capital charge, that is, a cost of using all capital. In contrast, net income includes a charge for using debt capital (interest) but no charge for using equity capital. Some measures of economic profit rely primarily on financial reporting numbers and others, such as EVA, include adjustments such as deducting cash taxes rather than tax expense or capitalizing rather than expensing R&D.

c) The major difference is that net income includes a capital charge, that is, a cost of using all capital. In contrast, economic profit includes a charge for using debt capital (interest) but no charge for using equity capital. Some measures of net income rely primarily on financial reporting numbers and others, such as EVA, include adjustments such as deducting cash taxes rather than tax expense or capitalizing rather than expensing R&D.

d) The major difference is that economic profit includes a capital charge, that is, a cost of using all capital. In contrast, net income includes a charge for using debt capital (interest) but no charge for using equity capital. Some measures of net income rely primarily on financial reporting numbers and others, such as EVA, include adjustments such as deducting cash taxes rather than tax expense or capitalizing rather than expensing R&D.

Budgeted cost rates are used for allocating variable costs of service departments to user departments because ________. Is it A and B…so is D Correct?

a) it provides service departments a greater incentive to be efficient

b) it protects user departments from inefficiencies in service departments

c) it protects managers in service departments from inflation

d) A and B

Is the comparison of actual overhead costs to budgeted overhead costs part of the product-costing process or part of the control process? Explain. NOT SURE AT ALL ON PART 1 or 2

The comparison of actual overhead costs to budgeted overhead costs is part of the

a) control process.

b) product-costing process.

It is part of this process because

a) it tells managers how to control inventory costs.

b) it tells managers when the actual results differ from what was expected.

c) it tells managers how to control actual overhead costs.

d) it tells managers how to improve the process.

Why do companies use variable costing for internal financial statements? NOT SURE ON THIS ONE EITHER

a) Production volume variance does not affect variable costing income but it does affect absorption costing income. b) A sales −oriented company wants to track the effect of sales on net income. c) Variable costing does not create an incentive to produce additional unneeded units to increase net income.
d) All of the above

Direct materials of $10,000 are requisitioned by the production supervisor for the production area. Job−order costing is used. The journal entry to record this transaction is: Is A correct?A. Work−In−Process Inventory $10,000

       Direct Materials Inventory $10,000

B. Direct Materials Inventory $10,000

       Work−In−Process Inventory $10,000 C. Direct Materials Inventory $10,000

        Accounts payable $10,000 D. Finished Goods Inventory $10,000

       Direct Materials Inventory $10,000

Thank you so much for confirming or correcting me and guiding me through those I am lost on! Thank you

Emily 

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ACC- 500 Questions- Set-2

Question No 11

Budgeted cost rates are used for allocating variable costs of service departments to user departments because ________.

A.

it provides service departments a greater incentive to be efficient

B.

it protects user departments from inefficiencies in service departments

C.

it protects managers in service departments from inflation

D.

A and B

Question No 12

When determining product costs, the last step in the traditional approach to cost allocation is ________.

A.

trace direct costs to products

B.

divide costs in each producing department into direct costs and indirect costs

C.

select cost pools and cost allocation bases in each production department and assign indirect department costs to the appropriate cost pool

D.

allocate the costs in each cost pool to the products in proportion to their usage of the related

cost−allocation

base

Question No 13

USC Company has the following information available:

Budgeted factory overhead costs $90,000

Actual factory overhead costs $80,000

Budgeted direct labor hours 20,000

Actual direct labor hours 21,000

Assume direct labor hours are the cost driver of factory overhead costs. The budgeted factory overhead rate is ________.

A.

$4.50 per direct labor hour

B.

$4.00 per direct labor hour

C.

$3.57 per direct labor hour

D.

$3.81 per direct labor hour

Question No 14

If a department identifies more than one cost driver for overhead costs, the department ideally should________.

A.

create as many cost pools as there are cost drivers

B.

put 80 percent of the costs into one pool and 20 percent into a second pool

C.

allocate 80 percent of the costs with 20 percent of the cost drivers

D.

select a single cost driver

Question No 15

The only difference between the net income between variable costing and absorption costing is the treatment of ________.

A.

fixed selling costs

B.

fixed manufacturing overhead costs

C.

variable administrative costs

D.

variable selling costs

Question No 16

Is the comparison of actual overhead costs to budgeted overhead costs part of the product-costing process or part of the control process? Explain.

The comparison of actual overhead costs to budgeted overhead costs is part of the

• Control Process or    2) Product Costing  Process

Then

it is part of this process because

A.

it tells managers how to control actual overhead costs.

B.

it tells managers when the actual results differ from what was expected.

C.

it tells managers how to control inventory costs.

D.

it tells managers how to improve the process.

Question No 27

The production volume variance is a line item on the ________ income statement.

A.

variable costing

B.

absorption costing and variable costing

C.

absorption costing

D.

contribution approach

Question No 17

The ________ system is better suited for a single physical unit or a few similar units.

A.

activity−based costing

B.

job−order costing

C.

process−costing

D.

activity−based management

Question No 18

In a job−order system, accountants apply factory overhead costs to

Work−In−Process Inventory by using the ________. The company does not use

activity−based costing.

A.

budgeted overhead rate

B.

actual overhead costs

C.

actual overhead rate

D.

budgeted indirect costs for value chain functions

Question No 19

Durante Company produces plastic cups in a one−department

process. The following data is available for the past month:

Work−in−process inventory, beginning 0

Units started 60,000

Units completed and transferred 48,000

Work−in−process inventory, ending                          12,000

The units in process at the end of the month are 100 percent complete with respect to materials and 50 percent complete with respect to conversion costs. What are the equivalent units for conversion costs for the month?

A.

30,000

B.

60,000

C.

54,000

D.

12,000

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