general business data bank

| August 13, 2017

1. By convention, short-term financial control
is accomplished by all the following except:

A.
Comparing actual to budgeted financial
results.
B.
Calculating a series of
cost and revenue variances at the end of the period.
C.
The use of flexible
budgets and standard costs.
D.
Explaining the total
operating-income variance for a given period.
E.
The use of productivity
analysis.

2. Operational control systems can be
distinguished from financial control systems:

A.
In the time horizon: financial-control
systems have a long-term perspective.
B.
Because they focus on
the control of basic business processes.
C.
Because such systems
rely on the use of flexible, not static, budgets.
D.
Because they focus on
explaining the total operating income variance for a period.
E.
They do not include
nonfinancial performance indicators.

3. Traditional financial control systems have
recently been criticized because:

A.
They use flexible, not static, budgets.
B.
They generally lead to
goal-congruent behavior on the part of managers.
C.
They focus more in
improving basic business processes than short-term financial results.
D.
They fail to incorporate
nonfinancial performance indicators into the evaluation process.
E.
They use static, not
flexible, budgets.

4.
One important short-term
goal for a company is to earn the projected operating income for the period.
Attainment of this goal is measured by comparing the actual operating income to
the:

A.
Flexible-budget operating income.
B.
Prior period’s operating
income.
C.
The income reflected in
the company’s balanced scorecard.
D.
Master budget operating
income.
E.
Industry average
operating income.

5. The total operating-income variance for a
period reveals whether a company has achieved:

A.
The sales level budgeted for the period.

B.
An adequate return on
investment (assets) during the period.
C.
Control of basic
business processes.
D.
Control of total
expenses for the period.
E.
The master budgeted
operating income for the period.

6. Another name for the total operating-income
variance for a period is:

A.
Flexible-budget variance.
B.
Master (static) budget
variance.
C.
Sales-volume variance.
D.
Production-volume
variance.
E.
Sales-mix variance.

7. Authoritative standards (within the context
of a standard cost system) are determined primarily by:

A.
Distributors.
B.
Employees.
C.
Customers.
D.
Suppliers.
E.
Managers.

8. The arrival of new manufacturing techniques
such as automation, flexible manufacturing systems, and cluster or cell
manufacturing has:

A.
Emphasized the importance of direct
labor variances.
B.
Not had an effect on the
importance of direct labor variances.
C.
De-emphasized the
importance of direct labor variances.
D.
Made direct labor
variances obsolete.
E.
Eliminated the need to
calculate and report direct materials variances.

9. An organization’s overall management
accounting and control system:

A.
Includes the planning function.
B.
Is also referred as the
organization’s core performance-measurement system.
C.
Is separate from its
operational control system.
D.
Includes nonfinancial,
but not financial, performance measures.
E.
Focuses on strategic,
not operational, control.

10.
The “flexible budget” can best be described as a budget that adjusts:

A.
Revenues for sales-dollar changes.
B.
Revenues and expenses
for changes in output.

C.
Expenses for changes in budgeted output
between two periods.
D.
For efficiency, but not
selling price and cost variances.
E.
For selling price and
cost variances, but not efficiency variances.

11.
Which of the following is different in a flexible budget compared to the master
budget for a period?

A.
Selling price per unit.
B.
Variable cost per unit.
C.
Budgeted fixed cost.
D.
Sales volume.

12. A
flexible-budget variance measures the impact on short-term operating profit of:

A.
Changes in sales volume.
B.
Changes in output during
the period.
C.
Differences in sales
mix—budgeted versus actual.
D.
Selling price and cost
differences—actual versus budgeted.
E.
Selling price, but not
cost differences—actual versus budgeted.

13. A
“standard cost” is a predetermined amount (e.g., cost) that:

A.
Should be incurred under relatively
efficient operating conditions.
B.
Will be incurred for an
operation or a specific objective.
C.
Must occur for an
operation or a specific objective.
D.
Cannot be changed once
it is established by management.
E.
Is useful for planning
and control but not inventory valuation purposes.

14.
Differences in expectation levels lead to two basic types of standards in a
standard cost system:

A.
Ideal and real.
B.
Ideal and currently
attainable.
C.
Normal and conceptual.
D.
Attainable and real.
E.
Current and future.

15.
An organization planned
to use $82 of material per unit of output, but it actually used $80 per unit.
During this period, the company planned to make 1,200 units, but actually
produced only 1,000 units. The flexible budget amount for materials is:

A.
$80,000.
B.
$82,000.
C.
$96,000.
D.
$98,400.

16. A
“currently attainable standard” emphasizes:

A.
Ideal or theoretical performance.
B.
Past performance of the
organization.
C.
Future performance of
the organization’s primary competitors.
D.
Maximum performance.
E.
Relatively efficient
operating performance.

17.
An organization subject to intense competitive pressures would most likely use:

A.
Ideal standards for its operations.
B.
Real standards for its
operations.
C.
Caution in even using
standards.
D.
A mix of types of
standards.
E.
Standards that are not
modified over time.

18. A
materials efficiency variance can be caused by all of the following except:

A.
Actual output volume of the period
(i.e., units produced).
B.
Performance of the
workers in using the materials.
C.
Quality of the
materials.
D.
Skill level of the
workers using the materials.
E.
Inadequate employee
supervision.

19. A
standard cost system:

A.
Cannot be used in conjunction with a
job-cost system.
B.
Is not permissible for
financial-reporting purposes.
C.
Is most easily
introduced in conjunction with a process-cost system.
D.
Is useful for planning
but not control purposes.
E.
Is useful for cost
control but not planning purposes.

20. A
______________ standard gets progressively tighter over time.

A.
Peak-efficiency.
B.
Currently attainable.
C.
Benchmarked.
D.
Flexible-budget.
E.
Continuous-improvement.

21.
Using continuous-improvement standards likely has the effect(s) of all the
following except:

A.
Reductions in inefficiencies.
B.
Reduced product defects.

C.
Constantly decreasing
standard levels.
D.
Improved productivity.
E.
Increasing pressure on
employees and managers.

22. A
total variable cost variance (such as for direct materials) can be broken down
into separate variances that evaluate:

A.
Price and efficiency.
B.
Units and cost.
C.
Volume and productivity.

D.
Sales volume versus
sales mix.
E.
Efforts and results.

23. A
standard cost system should be designed to generate and report variances:

A.
Coincidental with regular reporting
intervals.
B.
As soon as possible.
C.
Only when significant in
amount.
D.
Only when negative in
impact.
E.
Only when requested by
decision-makers.

24.
Which of the following benefits is not typically associated with a move
to a just-in-time (JIT) manufacturing system?

A.
Raw materials are delivered as close as
possible to time of production.
B.
Existence of long-term
contracts with selected suppliers.
C.
Reduction in employee
training and education costs.
D.
Decreases in
manufacturing lead time.
E.
Improved
customer-response time (CRT).

25.
The way managers and employees who are affected by a standard cost system
perceive the system will:

A.
Be of little consequence on the success
of the system if correctly implemented.
B.
Generally be minimal in
impact on the implementation of the system.
C.
Affect its success or
failure in implementing the system.
D.
Be difficult to assess.
E.
Not matter in the long
run.

26.
For control purposes, it is usually preferable to calculate the materials price
variance:

A.
At point of purchase.
B.
At point of production.
C.
At the end of the
period.
D.
Only if the materials
quantity variance is significant in amount.
E.
Only if it is
controllable by operating managers.

27.
The difference between the actual operating income of the period and master
budgeted operating income for the period is the:

A.
Total flexible-budget variance.
B.
Sales-volume variance.
C.
Sales price variance.
D.
Operating income
flexible-budget variance.
E.
Total operating income
variance.

28.
The difference between the actual sales volume for a period and the
flexible-budget sales volume is:

A.
The total sales-volume variance for the
period.
B.
The total
production-volume variance for the period.
C.
The sales price variance
for the period.
D.
The operating-income
sales volume variance for the period.
E.
A flexible-budget
variance.

29.
The difference between the flexible-budget operating income and the actual
operating income in a period is the:

A.
Sales-mix variance.
B.
Sales-volume variance.
C.
Sales price variance.
D.
Operating income
flexible-budget variance.
E.
Total operating income
variance.

30.
The difference between
the total actual sales revenue of a period and the total flexible-budget sales
revenue for the units sold during the period is the:

A.
Total flexible-budget variance.
B.
Sales volume variance.
C.
Selling price variance.
D.
Operating income flexible-budget
variance.
E.
Operating income
variance.

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