1.Under Agency Theory which of the following is not an example of a "sanction" resolution mechanism.

A.A requirement for Board Approval for an acquisition

B.Unannounced site visit to a franchisee

C.A restrictive debt covenant for a bank loan

D.A requirement for expense claims to be approved by the finance department

2.In a multi-product environment, when deciding if a product should be discontinued:

A.Direct fixed costs are relevant

B.Common fixed costs are relevant

C.All fixed costs are relevant

D.All fixed costs are irrelevant

4.A flexible budget is prepared in order to:

A.Take account of many different types of new information that may emerge after the master budget has been approved

B.More fairly evaluate the performance of managers and operations

C.Reduce the rigidity and constraints on innovation associated with traditional budgeting

D.None of the above

5.Underapplied manufacturing overhead indicates that:

A.Departmental overhead rates should be introduced

B.The costs of goods sold might be overstated

C.The finished good inventory might be undervalued

D.None of the above.