Managerial Accounting
15th Edition
ISBN: 9781337912020
Author: Carl Warren, Ph.d. Cma William B. Tayler
Publisher: South-Western College Pub
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Textbook Question
Chapter 8, Problem 1CMA
When compared to static budgets, flexible budgets:
- a. offer managers a more realistic comparison of budgeted and actual fixed cost items under their control.
- b. provide a better understanding of the capacity (volume) variances during the period being evaluated.
- c. encourage managers to use less fixed cost items and more variable cost items that are under their control.
- d. offer managers a more realistic comparison of budgeted and actual revenue and cost items under their control.
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In comparison to static budgets, flexible budgets:
Offer managers a more realistic comparison of budget and actual fixed cost items under their control
Encourage managers to use fewer fixed cost items and more variable cost items that are under their control.
Provide a better understanding of the capacity variances during the period being evaluated.
Offer managers a more realistic comparison of budget and actual revenue and cost items under their control.
Explain how standard costs and flexible budgets can be used for short-term profit analysis—that is,for financial-control purposes.
IDENTIFY AND DISCUSS THE DIFFERENCES BETWEEN STATIC AND FLEXIBLE BUDGETS.
Chapter 8 Solutions
Managerial Accounting
Ch. 8 - Prob. 1DQCh. 8 - Briefly describe the type of human behavior...Ch. 8 - What behavioral problems are associated with...Ch. 8 - What behavioral problems are associated with...Ch. 8 - Under what circumstances would a static budget be...Ch. 8 - Prob. 6DQCh. 8 - Prob. 7DQCh. 8 - Why should the timing of direct materials...Ch. 8 - Prob. 9DQCh. 8 - Give an example of how the capital expenditures...
Ch. 8 - At the beginning of the period, the Fabricating...Ch. 8 - Pasadena Candle Inc. projected sales of 800,000...Ch. 8 - Pasadena Candle Inc. budgeted production of...Ch. 8 - Pasadena Candle Inc. budgeted production of...Ch. 8 - Prob. 5BECh. 8 - Cash budget Pasadena Candle Inc. pays 40% of its...Ch. 8 - At the beginning of the school year, Craig Kovar...Ch. 8 - Digital Solutions Inc. uses flexible budgets that...Ch. 8 - Static budget versus flexible budget The...Ch. 8 - Prob. 4ECh. 8 - Production budget Healthy Measures Inc. produces a...Ch. 8 - Sales and production budgets Sonic Inc....Ch. 8 - Professional foes earned budget for a service...Ch. 8 - Prob. 8ECh. 8 - Prob. 9ECh. 8 - Prob. 10ECh. 8 - Prob. 11ECh. 8 - Direct labor cost budget Ace Racket Company...Ch. 8 - Prob. 13ECh. 8 - Factory overhead cost budget Sweet Tooth Candy...Ch. 8 - Cost of goods sold budget Delaware Chemical...Ch. 8 - Prob. 16ECh. 8 - Prob. 17ECh. 8 - Prob. 18ECh. 8 - Schedule of cash payments for service company...Ch. 8 - Prob. 20ECh. 8 - Capital expenditures budget On January 1, 20Y6,...Ch. 8 - Prob. 1PACh. 8 - Sales, production, direct materials purchases, and...Ch. 8 - Budgeted income statement and supporting budgets...Ch. 8 - Budgeted income statement and supporting budgets...Ch. 8 - Cash budget The controller of Bridgeport...Ch. 8 - Budgeted income statement and balance sheet As a...Ch. 8 - Prob. 1PBCh. 8 - Sales, production, direct materials purchases, and...Ch. 8 - Budgeted income statement and supporting budgets...Ch. 8 - Prob. 4PBCh. 8 - Cash budget The controller of Mercury Shoes Inc....Ch. 8 - Budgeted income statement and balance sheet As a...Ch. 8 - Analyze Johnson Stores staffing budget for...Ch. 8 - Prob. 2MADCh. 8 - Prob. 3MADCh. 8 - Prob. 4MADCh. 8 - Ethics in Action The director of marketing for...Ch. 8 - Prob. 3TIFCh. 8 - Evaluating the budgeting system in a service...Ch. 8 - Static budget for a service company A hank manager...Ch. 8 - Objectives of the master budget Dominos Pizza LLC...Ch. 8 - When compared to static budgets, flexible budgets:...Ch. 8 - Prob. 2CMACh. 8 - Ming Company has budgeted sales at 6,300 units for...Ch. 8 - Krouse Company produces two products, forged...
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- When would a static budget be effective in evaluating a managers performance?arrow_forwardWhich of the following is not a part of budgeting? A. planning B. finding bottlenecks C. providing performance evaluations D. preventing net operating lossesarrow_forwardIn comparing actual sales revenue to flexible budget sales revenue, would it be possible to have a favorable variance and still not have met revenue expectations?arrow_forward
- What are the advantages and disadvantages of the bottom-up budgeting approach?arrow_forwardBriefly describe the type of human behavior problems that might arise if budget goals are set too tightly.arrow_forwardWhy is it important to distinguish between variable costs and fixed costs for budgeting purposes?arrow_forward
- The Zero Base Budget (ZBB) is the budget system that most influences resource allocation management by involving the devolution of decision making power to the lower levels. Identify whether this statement is true or false. Select one:TrueFalsearrow_forwardDescribe how non output-based cost drivers can be incorporated into budgeting.arrow_forwardWhy might managers find a flexible-budget analysis more informative than a static-budget analysis?arrow_forward
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Responsibility Accounting| Responsibility Centers and Segments| US CMA Part 1| US CMA course; Master Budget and Responsibility Accounting-Intro to Managerial Accounting- Su. 2013-Prof. Gershberg; Author: Mera Skill; Rutgers Accounting Web;https://www.youtube.com/watch?v=SYQ4u1BP24g;License: Standard YouTube License, CC-BY