Namer Cris Mosovt Datei Managerial Aecouating 112 Exam3 IChapters 7, 8, 10. 11, 14 TRUEFALSE AND MULTIPLE CHOICE t. A budget may be prepared for any period of time. 2. Operating badgets include the sales budget, production badget, direct materials budget, direct labor budget, manufacturing overhead budget, selling and administrative expense budget, and the budgeted income statement Financial budgets include the capital expenditure badget, the cash budget, and the budgeted balance sheet. 3. The manufacturing overhead and the selling and administrative expenses budgets distinguish between variable and fixed overhead costs/expenses. 4. The cash budget includes all of the following except a. cash receipts b. cash disbursements c. financing d. cost of goods sold 5. 6. Standards that represent optimum levels of performance under perfect operating conditions are called: a. normal standards b, ideal standards c. rigorous standards d. current standards 7. Standards that represent efficient levels of performance that are attainable under expected operating conditions are called: a. normal standards b. ideal standards c. rigorous standards d. current standards a. is determined using a standard predetermined overbead rate b is broken out between variable and fixed components c uses an activity index to calculate the overhead rate &. The manufacturing overhead rate d. all of the above Materials variances, labor variances and overbead variances include: 9. calculations for the total dollar variances a. b. calculations for the price/controllable variances e, calculations for the quantity/volume variances d. all of the above Incremental analysis is the process used to identify the financial data that change under altermative courses of action. 10. 11. I ncremental analysis sometimes involves changes that at first glance might seem contrary to your intuition. For example, sometimes variable costs do not change and fixed costs do change under the alternative courses of action. 12. In incremental analysis, the only factors to consider are those costs and revenues that differ across alternatives. Those factors are called relevant costs. 13. A sunk cost is a lost benefit that occurs when a company gives up the opportunity to benefit from some other course of action. An opportunity cost is a cost that has already been incurred and will not be changed or avoided by any future decision. 14. 15. Some types of decisions resulting from incremental analysis include accepting orders at special prices, making or buying component parts or finished products, and selling products or processing them further. Capital budgeting involves choosing among various capital projects to find the one(s) that will maximize a company's return on its financial investment. 16. 17. Cash outflows related to equipment purchase and replacement include the initial investment, repairs and maintenance, increased operating costs, and overhaul of equipment. Namer Cris Mosovt Datei Managerial Aecouating 112 Exam3 IChapters 7, 8, 10. 11, 14 TRUEFALSE AND MULTIPLE CHOICE t. A budget may be prepared for any period of time. 2. Operating badgets include the sales budget, production badget, direct materials budget, direct labor budget, manufacturing overhead budget, selling and administrative expense budget, and the budgeted income statement Financial budgets include the capital expenditure badget, the cash budget, and the budgeted balance sheet. 3. The manufacturing overhead and the selling and administrative expenses budgets distinguish between variable and fixed overhead costs/expenses. 4. The cash budget includes all of the following except a. cash receipts b. cash disbursements c. financing d. cost of goods sold 5. 6. Standards that represent optimum levels of performance under perfect operating conditions are called: a. normal standards b, ideal standards c. rigorous standards d. current standards 7. Standards that represent efficient levels of performance that are attainable under expected operating conditions are called: a. normal standards b. ideal standards c. rigorous standards d. current standards a. is determined using a standard predetermined overbead rate b is broken out between variable and fixed components c uses an activity index to calculate the overhead rate &. The manufacturing overhead rate d. all of the above Materials variances, labor variances and overbead variances include: 9. calculations for the total dollar variances a. b. calculations for the price/controllable variances e, calculations for the quantity/volume variances d. all of the above Incremental analysis is the process used to identify the financial data that change under altermative courses of action. 10. 11. I ncremental analysis sometimes involves changes that at first glance might seem contrary to your intuition. For example, sometimes variable costs do not change and fixed costs do change under the alternative courses of action. 12. In incremental analysis, the only factors to consider are those costs and revenues that differ across alternatives. Those factors are called relevant costs. 13. A sunk cost is a lost benefit that occurs when a company gives up the opportunity to benefit from some other course of action. An opportunity cost is a cost that has already been incurred and will not be changed or avoided by any future decision. 14. 15. Some types of decisions resulting from incremental analysis include accepting orders at special prices, making or buying component parts or finished products, and selling products or processing them further. Capital budgeting involves choosing among various capital projects to find the one(s) that will maximize a company's return on its financial investment. 16. 17. Cash outflows related to equipment purchase and replacement include the initial investment, repairs and maintenance, increased operating costs, and overhaul of equipment