3. How is accounting information prepared by management accountants used within an organization?

A) to help operating managers make decisions

B) to plan an organization's operations

C) to control an organization's operations

D) all of the above

4. An unfavorable variance occurs on a performance report when ________.

A) the actual cost is less than the budgeted cost

B) the actual revenue is greater than the budgeted revenue

C) the actual profit is greater than the budgeted profit

D) the actual revenue is less than the budgeted revenue

5. A favorable variance occurs on a performance report when ________.

A) the actual profit is greater than the budgeted profit

B) the actual cost is greater than the budgeted cost

C) the actual revenue is less than the budgeted revenue

D) the actual profit is less than the budgeted profit

6. A budget ________.

A) provides feedback by comparing actual results with planned results

B) is a quantitative expression of a plan of action

C) ignores areas that are presumed to be running smoothly

D) includes deviations from planned results

7. Management-by-exception means that managers should ________.

A) concentrate on areas that deviate from the plan

B) in the absence of other evidence, presume that areas that conform with plans are running smoothly

C) A and B

D) none of the above

8. The Green Company held a Christmas party. The company expected attendance of 75 people and prepared the following budget:

Hotel room rental $600

Food 400

Entertainment 700

Decorations 200

Total Costs $1,900

Seventy five people attended the party. The following costs were incurred:

Hotel room rental $575

Food 500

Entertainment 525

Decorations 150

Total Costs $1,750

What is the variance for total costs?

A) $215 Unfavorable

B) $150 Favorable

C) $25 Favorable

D) $140 Unfavorable

9. The various stages through which a product passes are called the ________.

A) value chain

B) product performance plan

C) performance plan

D) product life cycle

10. Research and development is the function of a value chain that involves ________.

A) the detailed design and engineering of new processes

B) the generation of ideas related to new products only

C) the detailed design and engineering of products, services or processes

D) the generation of ideas related to new products, services or processes

11. Which of the following is a major factor causing changes in management accounting today?

A) additional value chain functions

B) small advances in technology

C) increased global competition

D) shift to manufacturing-based economy

12. The Institute of Management Accountants has adopted a set of standards for ethical conduct which includes ________.

A) competence, confidentiality, credibility and integrity

B) competence, integrity, confidentiality and objectivity

C) competence, confidentiality, credibility and objectivity

D) competence, integrity, morality and confidentiality