Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN: 9781337115773
Author: Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher: Cengage Learning
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Chapter 9, Problem 16MCQ
To determine
Identify the option which is an example of myopic behavior.
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2. What are some possible drawbacks to using standard costs that Sarah might consider?
a. Standards limit operating improvements because employees may be discouraged from improving beyond the standards.
b. Standards may become “stale” in a dynamic manufacturing environment.
c. Employees may focus only on efficiency improvement and their own operations rather than considering the larger objectives of the organization.
d. Since standards are impossible to attain, they are a distraction from the work at hand.
e. Since standards never change, they do not reflect reality.
Answers
a, b and c
b, c and d
c, d and e
a, d and e
b, d and e
Stricter rules for health, environment and safety (HSE) lead to:
a Reduced employment because taxes must be increased to pay for HSE measures
b. Reduced employment because it becomes more expensive for companies to hire people
c. Increase employment because there will be fewer accidents and thus fewer work-related injuries
d. Increase employment because HSE leads to new work tasks that require extra employees
5. Which of the following statements concerning ideal standards is incorrect?
a)Ideal standards may be better than practical standards when managers seek continual improvement
b)Ideal standards do not make allowances for waste, spoilage, and machine breakdowns
c)Ideal standards generally do not provide the best motivation for workers.
d)Ideal standards are better suited for cash budgeting than practical standards
Chapter 9 Solutions
Managerial Accounting: The Cornerstone of Business Decision-Making
Ch. 9 - Define the term budget. How are budgets used in...Ch. 9 - Prob. 2DQCh. 9 - Explain how both small and large organizations can...Ch. 9 - Prob. 4DQCh. 9 - What is a master budget? An operating budget? A...Ch. 9 - Explain the role of a sales forecast in budgeting....Ch. 9 - All budgets depend on the sales budget. Is this...Ch. 9 - Why is goal congruence important?Ch. 9 - Why is it important for a manager to receive...Ch. 9 - What is participative budgeting? Discuss some of...
Ch. 9 - A budget too easily achieved will lead to...Ch. 9 - Explain why a manager has an incentive to build...Ch. 9 - Discuss the differences between static and...Ch. 9 - Explain why mixed costs must be broken down into...Ch. 9 - What is the purpose of a before-the-fact flexible...Ch. 9 - Prob. 1MCQCh. 9 - Which of the following is part of the control...Ch. 9 - Which of the following is not an advantage of...Ch. 9 - The budget committee a. reviews the budget. b....Ch. 9 - A moving, 12-month budget that is updated monthly...Ch. 9 - Which of the following is not part of the...Ch. 9 - Before a direct materials purchases budget can be...Ch. 9 - The first step in preparing the sales budget is to...Ch. 9 - Which of the following is needed to prepare the...Ch. 9 - A company requires 100 pounds of plastic to meet...Ch. 9 - A company plans to sell 220 units. The selling...Ch. 9 - Select the one budget below that is not an...Ch. 9 - A company has the following collection pattern:...Ch. 9 - The percentage of accounts receivable that is...Ch. 9 - Which of the following is not an advantage of...Ch. 9 - Prob. 16MCQCh. 9 - For performance reporting, it is best to compare...Ch. 9 - To create a meaningful performance report, actual...Ch. 9 - To help assess performance, managers should use a...Ch. 9 - A firm comparing the actual variable costs of...Ch. 9 - Preparing a Sales Budget Patrick Inc. sells...Ch. 9 - Preparing a Production Budget Patrick Inc. makes...Ch. 9 - Preparing a Direct Materials Purchases Budget...Ch. 9 - Preparing a Direct Labor Budget Patrick Inc. makes...Ch. 9 - Preparing an Overhead Budget Patrick Inc. makes...Ch. 9 - Preparing an Ending Finished Goods Inventory...Ch. 9 - Preparing a Cost of Goods Sold Budget Andrews...Ch. 9 - Preparing a Selling and Administrative Expenses...Ch. 9 - Preparing a Budgeted Income Statement Oliver...Ch. 9 - Preparing a Schedule of Cash Collections on...Ch. 9 - Preparing an Accounts Payable Schedule Wight Inc....Ch. 9 - Preparing a Cash Budget La Famiglia Pizzeria...Ch. 9 - Flexible Budget with Different Levels of...Ch. 9 - Performance Report Based on Budgeted and Actual...Ch. 9 - Preparing a Sales Budget Tulum Inc. sells powdered...Ch. 9 - Preparing a Production Budget Tulum Inc. makes a...Ch. 9 - Preparing a Direct Materials Purchases Budget...Ch. 9 - Preparing a Direct Labor Budget Tulum Inc. makes a...Ch. 9 - Preparing an Overhead Budget Tulum Inc. makes a...Ch. 9 - Prob. 40BEBCh. 9 - Preparing a Cost of Goods Sold Budget Lazlo...Ch. 9 - Preparing a Selling and Administrative Expenses...Ch. 9 - Preparing a Budgeted Income Statement Jameson...Ch. 9 - Preparing a Schedule of Cash Collections on...Ch. 9 - Pilsner Inc. purchases raw materials on account...Ch. 9 - Preparing a Cash Budget Olivers Bistro provided...Ch. 9 - Flexible Budget with Different Levels of...Ch. 9 - Performance Report Based on Budgeted and Actual...Ch. 9 - Planning and Control a. Dr. Jones, a dentist,...Ch. 9 - Use the following information for Exercises 9-50...Ch. 9 - Prob. 51ECh. 9 - Production Budget and Direct Materials Purchases...Ch. 9 - Production Budget Aqua-Pro Inc. produces...Ch. 9 - Direct Materials Purchases Budget Langer Company...Ch. 9 - Direct Labor Budget Evans Company produces asphalt...Ch. 9 - Sales Budget Alger Inc. manufactures six models of...Ch. 9 - Production Budget and Direct Materials Purchases...Ch. 9 - Schedule of Cash Collections on Accounts...Ch. 9 - Schedule of Cash Collections on Accounts...Ch. 9 - Cash Payments Schedule Fein Company provided the...Ch. 9 - Cash Budget The owner of a building supply company...Ch. 9 - Flexible Budget for Various Levels of Production...Ch. 9 - Use the following information for Exercises 9-63...Ch. 9 - Use the following information for Exercises 9-63...Ch. 9 - Prob. 65PCh. 9 - Operating Budget, Comprehensive Analysis Allison...Ch. 9 - Use the following information for Problems 9-67...Ch. 9 - Use the following information for Problems 9-67...Ch. 9 - Use the following information for Problems 9-67...Ch. 9 - Ryan Richards, controller for Grange Retailers,...Ch. 9 - Participative Budgeting, Not-for-Profit Setting...Ch. 9 - Cash Budget The controller of Feinberg Company is...Ch. 9 - Optima Company is a high-technology organization...Ch. 9 - Direct Materials and Direct Labor Budgets Willison...Ch. 9 - Prob. 75PCh. 9 - Prob. 76CCh. 9 - Prob. 77CCh. 9 - Budgetary Performance, Rewards, Ethical Behavior...
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Which of the following is not a consideration when a manager is deciding to discontinue a product or product line? Whether the product has a positive or negative contribution margin. Determining if direct fixed costs could be avoided if the product or product line is discontinued. If discontinuing the product or product line will affect sales of remaining products. Not having any free capacity.arrow_forwardWhich of the following explains why managers compare the budgeted costs to actual costs? a. Managers only focus on the budgeted costs and infrequently compare these with actual costs. b. Managers only want to know how well they did to control costs. c. Managers never compare budgeted costs to actual costs. d. Managers evaluate how well they did to control costs and learn how to do better in the future. e. Managers only want to learn how to make better decisions in the future.arrow_forwardWhat of the following is NOT a Benefit of Activity Based Management? a.It assists in the budgeting process. b.It aids management in cost cutting and/or cost control and inferentially in product profitability. c.It causes managers to identify non-value added activities and therefore encourages thinking of means of reducing such activities. d.Is more complex than traditional accounting system because it uses multiple cost application rates, one for each activity or cost pool.arrow_forward
- Prepare a report from Mary Jane to Don explaining how these changes will affect Mirabel’s overall cost structure. For those changes that are controllable, make a recommendation considering the uncontrollable cost changes. Be certain to consider not only the company’s break-even point, but also the desired margin of safety.arrow_forwardWhat does a consistently negative responsibility marginimply will happen to the operating income of the business ifthe center is closed? Why? Identify several other factors thatshould be considered in deciding whether or not to close thecenter.arrow_forwardWhich of the following is false regarding activity-based costing (ABC)? a. Companies that have a high potential for cost distortions are more likely to benefit from ABC b. Opportunities for continuous improvement are rarely revealed by using ABC. c. The cost of implementing ABC may outweigh the benefits d. Increased accuracy with budgeting resources is often realizedarrow_forward
- Which of the following statements are false? SELECT ALL THAT APPLY a. One of the dangers of allocating common fixed costs to a product line is that such allocations can make the line appear less profitable than it really is. b. A new fixed cost that must be paid if a special offer is accepted is not relevant in making the decision. c. A cost that will be incurred regardless of which course of action a manager takes is relevant to the manager's decision. d. Your Company is considering replacing Machine X. The original cost of Machine X is not relevant to this decision.arrow_forwardWhy might relevant costs analysis be bad for a company if used too frequently? Multiple Choice It overemphasizes short-term goals and neglects long-term goals. It complicates the job of managers. It focuses too much on strategy and not enough on financial measures. It could lead to a permanent change in the production process of the company. It overemphasizes long-term goals and neglects short-term goals.arrow_forwardThe costs referred to as “controllable costs” are a. Costs which management decides to incur in the current period to enable the company to achieve objectives other than the filling of orders placed by customers. b. Costs which are likely to respond to the amount of attention devoted to them by a specified manager. c. Costs which are governed mainly by past decisions that established the present levels of operating and organizational capacity and which only change slowly in response to small changes in capacity. d. Costs which fluctuate in total in response to small changes in the rate of utilization of capacity.arrow_forward
- Which of the following statements are true? Multiple select question. Measuring and reporting quality costs does not solve quality problems. The impact of customer ill will is generally not found on quality control reports. As managers become more experienced in balancing prevention and appraisal activities, the need for quality cost reports often increases. Decreases in quality costs generally occur as soon as improvement programs are implemented.arrow_forwardPerverse Effects of Some Performance Measures. There is often more than one way to improve a performance measure. Unfortunately, some of the actions taken by managers to make their performance look better may actually harm the organization. For example, suppose the marketing department is held responsible only for increasing the performance measure “total revenues.” Increases in total revenues may be achieved by working harder and smarter, but they can also usually be achieved by simply cutting prices. The increase in volume from cutting prices almost always results in greater total revenues: however, it does not always lead to greater total profits. Those who design performance measurement systems need to keep in mind that managers who are under pressure to perform may take actions to improve performance measures that have negative consequences elsewhere. Required: For each of the following situations, describe actions managers might take to show improvement in the performance measure…arrow_forward1) Which of the following is a reason that has accelerated the demand for refinements to the costing system? A) The declining demand for customized products has led managers to decrease the variety of products and services their companies offer. B) The use of product and process technology has led to an increase in indirect costs and a decrease in direct costs. C) The increased of automated processes has led to the increase in direct manufacturing cost leading to a decrease in breakeven point. D) The increasing competition in product markets has led to an increase in contribution margin resulting in a decrease of breakeven point.arrow_forward
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