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Exam 15: Performance Evaluation

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Question 41

Multiple Choice

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Achieving the sales volume in the master budget is known as:

A) making the numbers.
B) lowballing.
C) cooking the books.
D) budget slack.

E) A) and C)
F) A) and B)

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Question 42

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Unless there are other factors to be considered, an investment opportunity with a return on investment that equals or exceeds the company's required rate of return would be accepted.

A) True
B) False

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Question 43

Multiple Choice

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The research and development department of Apple Computers would likely be organized as:

Decentralization encourages upper level management to concentrate on short-term decisions.

A cost variance is unfavorable if actual cost exceeds standard cost.

The Boyle Company estimated that April sales would be 150,000 units with an average selling price of $6.00. Actual sales for April were 149,000 units and average selling price was $6.12. The sales volume variance was:

The cellular phone division of Stegall Company had budgeted sales of $950,000 and actual sales of $900,000. Budgeted expenses were $600,000 while actual expenses were $550,000. Based on this information, a report prepared for the manager of this profit center would show:

The Electronics Division of Anton Company reports the following results for the current year: Anton Company has set a target return on investment (ROI) of 11% for the Electronics Division. The Electronic Division's return on investment is:

A static budget is one that shows estimated revenues and costs at multiple activity levels.

The Landrum Company provides the following standard cost data per unit of product: Variable overhead: $8.00 Landrum anticipated that they would produce and sell 24,000 units. During the period, the company produced and sold 25,000 units incurring $210,000 of variable overhead costs. The variable overhead flexible budget variance was:

Unfavorable flexible budget variances are those that are the result of lower than expected sales volume.

All of the following are characteristics that are required for effective responsibility accounting except:

Volume variances are computed for which of the following costs?

If the master budget prepared at a volume level of 10,000 units includes direct labor of $10,000, a flexible budget based on a volume of 11,000 units would include direct labor of $10,000.

The sales volume variance is the difference between sales revenue on the static budget and sales revenue on the flexible budget.

Stafford Company prepared a static budget for a production and sales volume of 10,000 units. What is net income if 9,000 units are sold?

The practice of delegating authority and responsibility is referred to as:

The Ferguson Company estimated that October sales would be 100,000 units with an average selling price of $6.00. Actual sales for October were 105,000 units and average selling price was $5.95. The sales volume variance was:

Howard Company provided the following selected information about its consumer products division for the current year: Based on this information, the division's investment amount was:

Which of the following is an incorrect statement regarding variances?