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11) How is the AARR method different, compared to the payback method? 12) Why is the finance theory important when managers use different methods that lead to different ranking of projects? 13) The manager at Nielson's Paper purchased a new upgraded machine with an initial investment of $409,000 and forecasted an increase.
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Learning Objective 11-3 1) The ________ measures the time it will take to recoup, in the form of expected future cash flows, the net initial investment in a project. A) income tax B) payback method C) net present value D) internal rate of return E) external rate of return 2) Managers prefer projects with ________ payback periods. A).
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Learning Objective 13-6 1) The fixed overhead flexible-budget variance is the difference between ________ and fixed overhead costs in the flexible budget. A) the actual results B) the static budget C) fixed overhead costs D) actual fixed overhead costs E) budgeted fixed overhead costs 2) When there is no efficiency variance, the fixed overhead spending variance is.
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Learning Objective 12-1 1) A ________ is the quantitative expression of a proposed plan of action by management for a specified period and helps managers coordinate the activities that need to be done to implement the plan. A) pro forma statements B) strategy C) budget D) coordination E) communication 2) ________ specifies how an organization matches its.
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Learning Objective 11-5 1) Relevant cash flow in discounted cash analysis: A) are not used in discounted cash flow analysis. B) is not a challenge in capital budgeting decisions. C) are obtained when managers identify only the past costs. D) are the similarities of the past costs of products and services. E) are the differences.
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Learning Objective 13-8 1) To make sure that managers interpret variances correctly and make appropriate decisions based on them, managers need to recognize that ________. A) variances are active indicators B) variances are easily miscalculated C) variances can have multiple causes D) variances are not accurate indicators E) decisions should not be made based on variances 2).
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Appendix Chapter 11 1) ________ is the decline in the general purchasing power of the monetary unit. A) Inflation B) Deflation C) Real rate of return D) Nominal rate of return E) Forecasted rate of return 2) ________ is the rate of return demanded to cover investment risk if there is no inflation. A) Inflated return B) Deflated return C).
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11) How do managers compute the receipts and disbursements on the schedule of cash collections? 12) Why do managers use sensitivity analysis in cash flow analysis? 13) The managerial accountant at Portsmouth Manufacturing reported the following information: Schedule for Cash Collection   Quarter 1Quarter 2Quarter 3Quarter 4   Accounts receivable balance$1,750,000 on 1/1/2013 From first-quarter 2013 sales$7,500,000$1,900,000 From second-quarter 2013.
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Learning Objective 13-2 1) A flexible budget calculates budgeted revenues and budgeted costs based on ________. A) actual input in the budget period B) data from previous budget periods C) data from multiple budget periods D) actual output in the budget period E) variances in the accuracy of previous budget periods. 2) A sales-volume variance is the.
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11) What are some of the causes of variances? 12) When should managers investigate the cause of variances? 13) How can managers use variance analysis to create a virtuous cycle of continuous improvement? 14) Can managers use both financial and non-financial performance measures to evaluate manager performance? 15) How does technology help managers improve.
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Learning Objective 12-3 1) Rolling budgets are the same as: A) Kaizen budgets. B) operating budgets. C) activity-based budgets. D) rolling forecasts. E) financial budgets. 2) Which of the following terms is used to describe an income statement and its supporting budget schedules? A) Budgetary slack. B) Financial budget. C) Financial planning analysis. D) Operating budget. E) Activity-based budget (ABB). 3) Which of.
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Learning Objective 12-2 1) ________ is meshing and balancing all aspects of production or service and all departments in a company in the best way for the company to meet its goals. A) Budget B) Strategy C) Operations D) Coordination E) Communication 2) Which of the following is not true about the framework for judging performance? A) Budgets.
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10) Why is the flexible-budget variance for revenues referred to as the selling-price variance? 11) The following data was gathered for Anu-U, an electronic commercial hair dryer manufacturer: Anu-U Budgeted fixed costs for production between 0 and 500,000 units$500,000 Budgeted selling price$5,000 per unit Budgeted production and sales100 units Actual production and sales85 units Required Compute the static-budget.
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11) Managers use computer programs to prepare pareto diagrams, and cause-and-effect diagrams with the goal to continue to reduce the mean defect rate, µ, and the standard deviation, σ. 12) What is a control chart? How do managers plot observations? 13) What are observations outside of the control limits? How are they.
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11) Managers determine the cause of flexible-budget variances when they subdivide the flexible-budget variance for direct-cost inputs into two or more detailed variances. What are two detailed variances of the flexible-budget variance for direct-cost inputs? 12) What three sources do managers use to obtain budgeted input prices and budgeted input quantities? 13).
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Learning Objective 10-3 1) Which of the following is not an advantage of COQ measures? A) The measure focuses on managers' attention on how poor quality affects operating income. B) Helps manager aggregate costs to evaluate tradeoffs among prevention costs. C) Helps manager aggregate costs to evaluate tradeoffs among D) Does not help manager.
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11) How do some companies evaluate their response time improvement efforts? 12) How do manufacturing cycle times affect revenue and costs? 13) How do companies calculate inventory carrying costs? 14) Customer response time is an example of a time-related customer measure. 15) The manager at Middle Plantation Manufacturing needs to evaluate the response time.
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11) The budget costs at companies are different for variable and fixed overhead costs. 12) Using activity-based cost drivers provide additional and detailed information that improves decision making compared with budgeting solely on output-based cost drivers. 13) Budgeting is a cross-functional activity. 14) How do sales managers and sales representatives build the revenue.
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11) Budgets coupled with responsibility accounting provide feedback to top management about the performance relative to the budget of different responsibility center managers. 12) Differences between actual results and budgeted amounts can help managers implement and evaluate strategies. 13) A manager that works at a company that is evaluated as a profit.
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Learning Objective 13-1 1) The difference between actual results and expected performances is referred to as the ________. A) variance B) critical area C) target numerate D) cardinal denominator E) parameter of importance 2) The expected performance is also referred to as the ________. A) variance B) target output C) critical value set D) financial objective E) budgeted performance 3) Variances assist managers.
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Learning Objective 12-6 1) ________ is the practice of underestimating budgeted revenues, or overestimating budgeted costs, to make budgeted targets more easily to achieve. A) Kaizen budgeting B) Budgetary slack C) Rolling budget D) Contingent budget E) Contingency budget 2) Which of the following is true about budgetary slack? A) Budgeting is most effective when lower-level managers actively.
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Learning Objective 11-1 1) ________ is the process of making long-run planning decisions for investments in projects. A) Payback B) Predictions C) Capital budgeting D) Initial investment E) Obtain information 2) In what stage of the capital budgeting process do managers identify potential capital investments that agree with the organization's strategy? A) Stage 1: Identify projects. B) Stage 2:.
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Learning Objective 13-4 1) To effectively plan variable overhead costs for a product or service, managers must focus attention on the activities that make a superior product and ________. A) create a balanced scorecard B) eliminate activities that do not add value C) instruct staff in time-saving initiatives D) calculate possible unused capacities E) curtail activities.
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Learning Objective 13-3 1) Managers find it useful to subdivide the flexible-budget variance for direct cost variance into a ________ variance and an efficiency variance. A) price B) input C) price recovery D) productivity E) sales-volume 2) What is a disadvantage to managers that use actual input data from past periods to calculate price and efficiency variances? A).
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Learning Objective 11-6 1) In which stage of the capital budgeting process begins the choice to manage the project? 2) Which of the following is not true about capital budgeting projects? A) The building projects in capital-budget projects are less complex. B) The building projects are more complex in capital-budget projects. C) The managers engage.
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Learning Objective 10-7 1) ________ is the time it takes to fulfill a customer order. A) Average waiting time B) Customer-response time C) Purchase-order lead time D) Manufacturing lead time E) Manufacturing cycle time 2) ________ is how long it takes from the time an order is received by manufacturing to the time finished good is produced. A).
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Learning Objective 10-6 1) ________ is a "push through" system that manufactures finished goods for inventory on the basis of demand forecasts. A) Bottle neck B) Time driver C) Value stream D) Carrying costs E) Materials requirements planning 2) ________ is a "demand pull" manufacturing system that manufactures each component in a production line as soon as,.
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Learning Objective 13-5 1) A flexible budget allows management to highlight the differences between actual costs and ________; and, management uses budgeted costs; and, ________ for the actual output level. A) actual quantities; budgeted quantities B) expected costs; actual quantities C) expected quantities; expected costs D) cost variances; output variances E) fixed overhead; overhead variances 2) Management.
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Appendix Chapter 12 1) The schedule of expected cash receipts and disbursements that predicts the effects on the cash position at the given level of operations is ________. A) cash budget B) flexible budget C) operating budget D) unexpected budget E) administrative budget 2) Which of the following is true about the cash available for needs before.
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11) What is the purpose of using financial planning models in sensitivity analysis? 12) What types of risk do managers identify when they implement sensitivity analysis? 13) What should managers do if they use sensitivity analysis and they detect small declines in operating income? What could happen if direct material prices increase.
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10) The manager at the Trailer Manufacturing plant has the option to continue to inspect, or redesign. Listed below are the estimated effects of quality improvement on costs of quality report obtained by the managerial accountant. Estimated Effects of Quality Improvement on Costs of Quality   Inspection Option Relevant itemsRelevant Benefit per unitQuantityTotal Benefits Savings.
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Learning Objective 13-7 1) Which of the following if not true about the variance-analysis approach? A) Variable costs have unused capacity. B) Variable costs never have any unused capacity. C) The detailed analysis helps managers identify and focus on the areas not operating as expected. D) Manages of small businesses understand their operations based on.
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Learning Objective 10-4 1) ________ arise in preparing and issuing purchase orders, receiving and inspecting the items included in the orders, and matching invoices received, purchase orders, and delivery records to make payments. A) Costs of quality B) Stockout costs C) Carrying costs D) Purchasing costs E) Ordering costs 2) ________ are the cost of goods acquired.
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11) The static-budget variance is the difference between the actual result and the corresponding budgeted amount in the static budget. 12) What are the benefits of variance analysis to a public official? 13) How does variance analysis relate to the five-step decision-making process? 14) Laurel Corporation used the following data to evaluate their.
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Learning Objective 11-4 1) The ________ divides the average annual income of a project by a measure of the investment in it. A) real rate of return B) nominal rate of return C) discounted payback method D) discounted cash flow method E) accrual accounting rate of return (AARR) 2) Which of the following is not true about.
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Learning Objective 10-2 1) A ________ is a chart that indicates how frequently each type of defect occurs, ordered from the most frequent to the least frequent. A) chart B) linear C) quality D) pareto diagram E) lean production 2) A ________ identifies potential causes of defects using a diagram that resembles the bone structure of a.
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11) How does information-gathering technology with barcoding increase the reliability and timeliness of inventory information? 12) What is the economic-order-quantity decision model? 13) When are the relevant ordering and carrying costs equal in EOQ models? 14) What do managers do when they are uncertain about demand, lead time, or the quantity that suppliers.
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18) The managerial accountant at the Chesapeake Bay Circuit Manufacturing Company expects to sell 120,000 circuits in 2013 for $12 each. There are 5,000 circuits in beginning finished goods inventory with target ending inventory of $5,000 circuits. The company keeps no work-in-process inventory. Required Compute the amount of sales revenue reported on.
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Learning Objective 12-4 1) ________ are mathematical representations of the relationships among operating activities, financing activities, and other factors that affect the master budget. A) Cash budget B) Master budget C) Process budget D) Production analysis E) Financial planning models 2) ________ is a "what-if" technique that examines how a result will change if the original predicted.
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16) Glasswall Company sells 300 windows per week. Purchase-order lead time is 2 weeks and the economic order quantity is 475 units. What is the reorder point? A) 175 units B) 475 units C) 600 units D) 775 units E) 1,200 units 17) Mary's Bakery can predict with virtual certainty the demand for its products. Mary's.
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11) Rapid, meaningful feedback is critical because the lack of inventories in a demand-pull system makes it urgent for managers to detect and solve problems in a time-efficient manner. 12) How does an increase in demand of a product or service affect the production process? 13) How do managers use enterprise resource.
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Learning Objective 10-5 1) ________ is the purchase of materials so that they are delivered just as needed for production. A) Appraisal B) Just-in-time purchasing C) Conformance quality D) Manufacturing lead time E) Manufacturing cycle efficiency 2) ________ is inventory held at all times regardless of the quantity of inventory ordered using the EOQ model. A) Appraisal B) Prevention C).
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11) A rolling budget is another approach to the manager's effort to reduce budgetary slack. 12) Pressure from performance embedded in stretch targets permit employees to engage in illegal and unethical practices when working in other countries. 13) The higher and more accurate the budgeted profit forecasts of division managers, the higher.
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Learning Objective 12-7 1) Which of the following is not true about budgeting in multinational companies? A) Managers reduce the possible negative impact on performance caused by unfavorable exchange rate movements. B) Managers need to understand the political, legal, and economic movements in the different countries that engage in corporate operations. C) Countries that.
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Learning Objective 11-2 1) ________ measure all expected future cash inflows and outflows of a project discounted back to the present point in time. A) Income tax B) Payback period C) Net present value D) Internal rate of return E) Discounted cash flow methods 2) The minimum acceptable annual rate of return on an investment is referred.
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Learning Objective 11-7 1) In computer-integrated manufacturing technology (CIM): A) computers give instructions that quickly and automatically set up and run equipment to manufacture many different products. B) managers do not need to track the rapid changes of consumer demand in the future. C) promotes a reduction in worker knowledge of, and experience with,.
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Learning Objective 12-5 1) ________ is an arrangement of lines of responsibility within an organization. A) Revenue center B) Responsibility center C) Responsibility accounting D) Organization structure E) Cost center 2) ________ is a part, segment, or subunit of an organization whose manager is accountable for a specified set of activities. A) Revenue center B) Responsibility center C) Responsibility accounting D).
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