Quiz 10 - Acct

Management Accounting Question (Qualitative Short Answer) a. Why is the sales forecast the starting point in budgeting? b. What is a perpetual budget? c. Which is a better basis for evaluating actual results: budgeted performance or past performance? Why? d. The materials price variance can be computed at what two different points in time? Which point is better and why? e. What effect, if any, would you expect purchasing poor-quality materials to have on direct labor variances? f. Distinguish between ideal and practical standards. g. Costs associated with the quality of conformance can be broken down into four broad groups. What are these four groups and how do they differ? h. What is likely the most effective way to reduce a company's total quality costs? i. What are the three main uses of quality cost reports?

PLEASE ANSWER ALL TRUE OR FALSE 2. The most important cost of a modern budgeting system is forced management planning.3. In general, the starting point in preparing a master budget should be to forecast production volume, if the company has a relatively large manufacturing capacity and operates in a highly competitive industry.

Q1) (Write in box “True or False “ )                                                                                                           A. The most forward-looking budget is the strategic plan, which sets the overall goals and objectives of the organization.                                                                                                                 (       )                                               B. An activity-based flexible budget is based on budgeted costs for different activity and related cost driver.                                                                                                                (         )                                                                                                                         C. Managers trying to evaluate the effects of changes in volume of goods or services produced might not be interested in upward changes such as increased sales expected from increases in promotion or…

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‘Budgeting has a number of different purposes including: Planning; Control; Performance evaluation; Motivation. Some managers believe that zero-based budget is more beneficial than other types of the budget for firms.’ Critically discuss the above statement with reference to academic literature. In your discussion, you should refer to the budgeting systems zero-based and incremental.

Practice 3 : a)     Explain the importance of incentive systems for motivating performance. b)     Identify and explain the components of management compensation and the tradeoffs that compensation designers make. c) What is meant by the term flexible budget? What role do flexible budgets play in evaluating performance?

Ma1. Which of the following statements is true?   A. Budget reports comparing actual results with planned objectives should be prepared only once a year   B. OA static budget is most useful for evaluating a manager's performance in controlling variable costs   C. The master budget is not used in the budgetary control process   D. OA static budget ignores data for different levels of activity

'Budgeting has a number of different purposes including: Planning; Control; Performance evaluation; Motivation. Some managers believe that zero-based budget is more beneficial than other types of the budget for firms.

What are some of the benefits of a self-imposed budget? Choose all that apply. Top-down mentality Inclusiveness of all managers Fear of punishment tends to motivate Budgets are more realistic More autonomy Greater accuracy Lowers employee morale 10 step cycle Better motivation

Estimating the effects of changes in budget assumptions, such as determining the impact of an increase or decrease in sales, is called:   Question 4 options:   static budget analysis.   sensitivity analysis.   variance analysis,   cost reduction analysis.       (Ch 10) An advantage of a flexible budget is that it:   Question 5 options:   allows comparison of actual costs to master (static) budget costs.   considers only variable costs.   allows comparisons of actual costs to the costs that should have been incurred, given the level of sales.   allows management freedom in meeting profitability goals.

1. Which of the following is NOT an objective of the budgeting process? a. O a. To communicate management's plans throughout the entire organization O D.To provide a means of allocating resources to those parts of the organization where they can be used most effectively С. To ensure that the company continues to grow OTo uncover potential bottlenecks before they occur

Various types of budgets facilitate understanding about the big picture of a business. There are budgets that are set and unchangeable, as well as budgets that allow for variability. •What are two different types of budgets? And how do they compliment each other? •What is the difference between a flexible budget?and a static budget? •Which budget works best for a business?

For most organizations, a budget is the benchmark for evaluating actual performance. O True O False

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1.Using a flexible budget, actual results can be compared to what costs should have been at the actual level of activity. True or False   2.Fixed costs should not be included in a flexible budget because they do not change when the level of activity changes. True or False   3.Actual costs are determined by plugging the actual level of activity for the period into the cost formulas used in flexible budgets.  True or False   4.If activity is higher than expected, total fixed costs should be higher than expected. If activity is lower than expected, total fixed costs should be lower than expected. True or False

19. What is the main advantage of a flexible budget? a. It is easier to prepare than a static budget b. It can adapt to changes in activity levels and provide more accurate financial control c. It does not require regular revisions d. It is based on historical data

Which of the following statements about top down budgeting is true? Multiple Choice  It is an appropriate method to use in times of financial stress.  Eliminates a manager's excuse who tries to claim that his budget is unrealistic  The budget process is often more efficient.  It allows senior management to better prioritize resources to propelling the growth of the company

42.  A static budget Group of answer choices shows planned results at the original budgeted activity level. is useful in evaluating a manager’s performance by comparing actual variable costs and planned variable costs. is changed only if the actual level of activity is different than originally budgeted. should not be prepared in a company.

I. A tight budget may create ______. Why? a. budgetary slack b. discouragement c. a flexible budget d. a "spend it or lose it" mentality.   2. The first step of the budget process is ______. Why? a. plan b. direct c. control d. feedback   3. Static budgets are often by ______. Why? a. production departments b. administrative departments c. responsibility centers d. capital projects   4. The total estimated sales for the coming year is 250,000 units. the estimated inventory at the beginning of the year is 22,500 units, and the desired inventory at the end of the year is 30,000 units. The total production indicated in the production budget is _____. Show your solution.   5. Dix Company expects $650,000 of credit sales in March and $800,000 of credit sales in April. Dix historically collects 70% of its sales in the month of sales and 30% in the following month. How much cash does Dix expect to collect in April? Show your solution.…