1. A decentralized organization is one in which: a. only top-level management is given decision-making authority. b. managers at various levels throughout the organization are given decision-making authority. c. each employee in the organization is given permission to make decisions about their company. d. each stockholder is given decision-making authority. 2. A local chain department store grants each of its store managers the authority to make buying decisions for their stores. Granting managers this kind of authority is found in which type of organization? a. Desegmented b. Centralized c. Decentralized d. Segmented 3. A local chain electronics store does not allow its store or district managers to make important decisions about their stores. The main role of store managers is to supervise employees and make sure day-to-day transactions run smoothly while district managers supervise store managers and report profitability data back to top-level management. Not allowing store or district managers decision-making authority is most likely to be found in which type of organization? a. Centralized b. Desegmented c. Segmented d. Decentralized 4. When a few individuals at the top of an organization retain decision-making authority, the organization is referred to as a(n): a. decentralized organization. b. profit center. c. investment center. d. centralized organization. 5. Which of the following statements regarding the structure of organizations is false? a. In a decentralized organization, decision-making authority is confined to top-level management. b. In a decentralized organization, there may be a lack of coordination and communication between segments. c. When decision-making authority is spread among too many managers, managers may become so concerned with their own area of responsibility that they lose sight of the company's overall focus. d. Decentralization may make it difficult for managers to share unique and innovative ideas. 6. Which of the following is an advantage of decentralization? a. It allows managers to focus on their own area of responsibility rather than what is best for the company as a whole. b. It requires very little as far as manager training costs. c. It allows top-level management who normally work at corporate headquarters to get involved with the day-to-day decisions that need to be made at lower levels. d. It allows decisions to be made in a more timely manner. 7. Which of the following is not an advantage of decentralization? a. It allows lower-level managers to focus on their own particular goals and objectives without having to consider the overall company's goals and objectives. b. It allows top-level managers more time to devote to long-range strategic planning. c. It permits lower-level managers to gain valuable on-the-job training in order to become better managers. d. It often creates higher job satisfaction for managers. 8. Which of the following is often not a disadvantage of decentralization? a. Lack of coordination and communication between segments. b. Higher training costs for lower-level managers. c. Decreased job satisfaction for lower-level managers. d. Lack of company focus as lower-level managers may make decisions that benefit their own particular segment. 9. Which of the following is a disadvantage of decentralization? a. Lower training costs for lower-level managers. b. Lack of coordination and communication between segments. c. Less timely decisions are able to be made on a day-to-day basis. d. Decreased job satisfaction for lower-level managers. 10. "Responsibility accounting" is the concept that says: a. managers should never be held entirely responsible for things that happen within the particular segment in which they are in charge. b. managers should be held entirely responsible for all investment decisions that impact the particular segment in which they are in charge. c. managers should be responsible for both revenues and costs of their particular segment. d. managers should be held responsible for only those things under their control. 11. A budget for a single unit of a product or service is called as a: a. fixed cost. b. real cost. c. total cost. d. standard cost. 12. Which of the following statements is true regarding the budgeted cost for direct materials? a. It would be used on a static budget but not a flexible budget. b. It would consist of two components - a standard quantity and a standard price. c. It must be determined after materials are purchased for the year. d. It can not be determined if a company uses a just-in-time inventory system. 13. Variance analysis compares: a. standard costs and actual costs. b. product costs and period costs. c. static budgets and flexible budgets. d. practical standards and ideal standards. 14. Which of the following statements is false regarding task analysis? a. It emphasizes what it should cost to produce a product rather than historical costs. b. It may involve the use of engineers. c. It examines the production process in detail. d. It uses actual historical data in the determination of standard costs. 15. Task analysis: a. is used to determine the tasks that production employees should complete on a daily basis. b. is used to set standard costs. c. is used to evaluate employee performance. d. emphasizes the historical costs of a product. 16. A(n) ____ is attainable only when near-perfect conditions exist. a. practical standard b. static budget c. flexible budget d. ideal standard 17. In most companies, machines break down occasionally and employees are often less than perfect. Which type of standard acknowledges these characteristics when determining the standard cost of a product? a. Practical standard b. Efficiency standard c. Budgeted standard d. Ideal standard 18. Hathaway Inc. produces and sells golf umbrellas to local resorts. Hathaway anticipates April to be a busy month with the sale of 2,000 umbrellas. The company has prepared the following static budget for April: Sales revenue (2,000 units) $60,000 Variable costs: Direct materials 6,000 Direct labor 8,000 Overhead 2,500 Fixed costs 6,000 Net operating income $37,500 19. During April, Hathaway actually produced and sold 2,300 umbrellas. What should be Hathaway's net operating income in April based on a flexible budget? a. $35,025 b. $37,500 c. $43,125 d. $44,025 20. Hoppe Inc. manufactures widgets. Management has determined that each widget has a standard materials cost of $3.50 when 2.5 ounces of raw material at a cost of $1.40 per ounce are used. The static budget for the month of December showed an estimated production of 4,000 widgets in December. During December, 4,300 widgets were actually produced. The actual cost for each widget was $3.60 when 2.25 ounces of raw material at a cost of $1.60 per ounce were purchased and used. What should be the total direct materials cost according to Hoppe's flexible budget for December? a. $15,050 b. $14,400 c. $14,000 d. $15,480 Violetta Inc. manufactures plastic storage boxes. Management has determined that each medium-sized box has a standard materials cost of $1.20 when 4 pounds of raw material at a cost of $.30 per pound are used. The static budget for the month of March showed an estimated production of 15,000 boxes in March. During March, 17,000 boxes were actually produced. The actual cost for each box was $1.56 when 3.9 pounds of raw material at a cost of $.40 per pound were purchased and used. What should be the total direct materials cost according to Violetta's flexible budget for March? a. $18,000 b. $23,400 c. $20,400 d. $26,520