Question 13

The total manufacturing overhead variance can be described as:

A.Being calculated by adding the Budget Variance to the Volume Variance.

B.Being calculated by adding the Spending Variance to the Efficiency Variance.

C.The difference between the static budget overhead predicted and the actual overhead incurred.

D.Only being concerned with variable manufacturing overhead.

E.The amount by which manufacturing overhead has been overallocated or underallocated to production.

14)Tudor Incorporated has subsidiaries all over the world but its headquarters are in Manhattan. The company currently uses centralized services for accounting, marketing, payroll, and information technology. You work for a service firm that helps companies decentralize their operations. As a consultant, you must convince Tudor of the benefits of a decentralized organizational structure. What benefit from the following list would you cite when making your pitch?

A.Decentralization reduces the risk that the company will duplicate certain costs or assets.

B.Decentralization allows corporate managers to become more involved in the day-to-day operations of subsidiaries.

C.Subsidiaries will be better equipped to build and maintain close relationships with important local customers.

D.Decentralization will ensure that the goals of the unit managers will align seamlessly with the overall goals of the corporation.

E.Unit managers will be better equipped for the job market, possibly becoming CEOs at other firms.

15)

Herno Inc. manufactures high quality winter coats. Their headquarters are in Oslo, Norway but they have manufacturing plants in Sweden, Iceland, France, and Poland. Each plant is considered an investment center. The company's managerial accountant would like to create performance measurement report for each of the subsidiary plants. If goal incongruence is the biggest concern, what tool should the accountant avoid for evaluation?

A.Economic Value Added (EVA)

B.Employee Satisfaction

C.Profit Margin x Asset Turnover

D.Balanced Scorecard

E.Residual Income (RI)