Select the letter pertaining to the best answer.

1) The practice of comparing a company with its prior performance or with best practices from other companies is called ________. A) benchmarking B) competitive analysis C) differentiation analysis D) budgeting

2) Which of the following is NOT a benefit of benchmarking? A) It helps companies determine where they can improve. B) It does not help management highlight company problems. C) It can be used to compare a company's budgets to other leading companies through the use of industry averages. D) It helps companies develop budgets to assist in meeting performance goals.

3) Which of the following statements is true of the budgeting process? A) If a company carefully plans for its future, there will be no need to make modifications during the budget period. B) It is a continuous process that encourages communication. C) It shows the actual performance of the business. D) Managers and employees are motivated to accept the budget's goals because they enjoy having their work monitored and evaluated.

4) Which of the following is an example of the planning function of the budgeting process? A) A budget demands integrated input from different business units and functions. B) Employees are motivated to achieve the goals set by the budget. C) Budget figures are used to evaluate the performance of managers. D) The budget outlines a specific course of action for the coming period.

5) Which of the following is an example of the benchmarking function of the budgeting process? A) A budget demands integrated input from different business units and functions. B) Budgeting requires close cooperation between accountants and operational personnel. C) Budget numbers are used to evaluate the performance of managers. D) The budget outlines a specific course of action for the coming period.

6) Which of the following is an example of the coordination and communication function of the budgeting process? A) A budget demands integrated input from different business units and functions. B) Employees are motivated to achieve the goals set by the budget. C) Each department acts independently because the department manager will be evaluated on actual departmental results. D) A budget adjustment in one department will have no effect on other departments.

7) All of the following are true for planning a budget except: A) A well-planned budget should never need modifications. B) If a company learns of a revenue short fall when compared to budget, the company must modify its plan and devise strategies to increase revenue or cut expenses. C) Decisions by management are based on a formalized budgeted plan to prevent haphazard decision making. D) Budgeting requires managers to plan for the company's future.

8) Alphonse Company manufactures staplers. The budgeted sales price is $16.00 per stapler, the variable costs are $3.00 per stapler, and budgeted fixed costs are $12,000. What is the budgeted operating income for 4,100 staplers? A) $53,300 B) $41,300 C) $65,600 D) $12,300

9) Which of the following statements is true of absorption costing? A) It considers variable selling and administrative costs as product costs. B) It considers fixed selling and administrative costs as product costs. C) It considers fixed manufacturing overhead cost as product costs. D) It considers variable manufacturing overhead cost as period costs.

10) Following GAAP, the income statement issued to investors and creditors must ________. A) be prepared in the traditional format B) be prepared using variable costing C) be prepared in the contribution margin format D) show the value of contribution margin 11) Which of the following is true of the traditional format of the income statement? A) It is prepared under the variable costing method. B) It shows contribution margin as a line item. C) It is not allowed under IFRS. D) It is prepared under the absorption costing method.

12) Absorption costing considers ________ as product costs. A) variable manufacturing overhead B) sales salaries and commissions C) administrative office salaries D) advertising costs

13) Which of the following is considered a period cost under variable costing but not under absorption costing? A) fixed selling and administrative costs B) variable manufacturing costs C) fixed manufacturing overhead D) variable selling and administrative costs

14) Which of the following is considered a period cost in absorption costing? A) variable manufacturing overhead costs B) fixed selling and administrative costs C) fixed manufacturing overhead costs D) semi-variable manufacturing overhead costs

15) Gross profit is calculated by deducting ________ from sales revenue. A) total fixed costs B) cost of goods sold C) total variable costs D) selling and administrative costs

16) Arianell, Inc. reports the following information for August:

Sales Revenue $800,000 Variable Cost of Goods Sold 130,000 Fixed Cost of Goods Sold 40,000 Variable Selling and Administrative Costs 150,000 Fixed Selling and Administrative Costs 60,000

Calculate the gross profit for August using absorption costing. A) $740,000 B) $650,000 C) $670,000 D) $630,000

17) Morwenna, Inc. reports the following information for August:

Sales Revenue $900,000 Variable Cost of Goods Sold 150,000 Fixed Cost of Goods Sold 50,000 Variable Selling and Administrative Costs 160,000 Fixed Selling and Administrative Costs 60,000

Calculate the operating income for August using absorption costing. A) $480,000 B) $310,000 C) $1,120,000 D) $420,000

18) Mirabella Company assigns direct materials, direct labor and both variable and fixed overhead to its product costs. Mirabella Company is using ________. A) absorption costing B) variable costing C) batch costing D) composite costing

19) Which of the following is NOT a benefit of a static budget performance report? A) It is useful in evaluating a manager's effectiveness when actual sales approximate budgeted amounts. B) It is useful in evaluating a manager's control over fixed costs. C) It is useful in evaluating a manager's control over variable costs. D) It is useful in evaluating a manager's control over fixed selling and administrative expenses.

20) The difference between actual results and expected results in a static budget is called: A) static budget variances B) mobile budget report C) budgetary control report D) flexible budget report