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QUESTION 10 Which of the following types of budgeting procedures is the most effective for measuring performance? Static budgeting Capital budgeting Flexible budgeting Strategic budgeting

QUESTION 10

  1. Which of the following types of budgeting procedures is the most effective for measuring performance?

Static budgeting

Capital budgeting

Flexible budgeting

Strategic budgeting

QUESTION 11

  1. The flexible budget:

Is not constrained to the relevant range

Eliminates the need for a master budget

Is prepared before the master budget

Is a series of static budgets at different levels of activity

QUESTION 12

  1. Responsiblity accounting is the concept:

A firm is responsible for reporting to the public all activities that have a social impact, such as pollution control

Each activity within a firm is controlled by a manager who is accountable for costs; costs and revenues; or costs, revenues, and investments, depending on the degree of responsibillity assigned

A firm should apply generally accepted accounting principles on a basis consistent with preceding years

A firm should be objective in accounting and should use historical costs rather than current-value concepts

QUESTION 13

  1. In which of the following is a manager responsible for costs, revenues and assets?

Revenue center

Cost center

Profit center

Investment center

QUESTION 14

  1. Pharmall Company manufactures two types of medicine, Ezsleep and Pepeze. The company can sell as many bottles of each product as it can produce, but production is limited by availability of direct labor hours. The revenues, costs and labor products for the two products are shown below. How much larger or samller would Pharmall's earnings be if the company proudcted Pepeze instead of Ezsleep with the 1,000 available direct labor hours?

EZ Sleep

Pepeze

Selling price per 100 bottles

$400

$600

Variable costs per 100 bottles

$240

$200

Labor costs per 100 bottles

10

20

$4,000 larger

$4,000 smaller

$6,000 larger

$6,000 smaller

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