KA2e_SelfStudy_Ch21

KA2e_SelfStudy_Ch21 - File:ch21,Chapter21: MultipleChoice 1. a) b) c)usingstaticbudgets d)

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
File: ch21, Chapter 21: Budgetary Control and Responsibility Accounting Multiple Choice 1. Budgetary control involves all but one of the following: a) modifying future plans. b) analyzing differences. c) using static budgets. d) determining differences between actual and planned results. Ans: c Response A: Modifying future plans is part of budgetary control. Response B: Analyzing differences between actual results and planned results is part of budgetary control. Response C: Correct! Budgetary control involves the use of flexible, not static budgets, because flexible budgets provide the ability to make comparisons between different levels of activity, not just one level. Response D: Determining differences between actual results and planned results is part of budgetary control. 2. A static budget is useful in controlling costs when cost behavior is: a) mixed. b) fixed. c) variable. d) linear. Ans: b Response A: A static budget is useful for controlling fixed, not mixed, costs. Response B: Correct! A static budget is useful for controlling fixed costs. Response C: A static budget is useful for controlling fixed, not variable costs. Response D: A static budget is useful for controlling fixed, not linear costs. 3. At zero direct labor hours in a flexible budget graph, the total budgeted cost line intersects the vertical axis at $30,000. At 10,000 direct labor hours, a horizontal line drawn from the total budgeted cost line intersects the vertical axis at $90,000. Fixed and variable costs may be expressed as: a) $30,000 fixed plus $6 per direct labor hour variable. b) $30,000 fixed plus $9 per direct labor hour variable. c) $60,000 fixed plus $3 per direct labor hour variable. d) $60,000 fixed plus $6 per direct labor hour variable. Ans: a Response A: Correct! The intersection point of $90,000 is total budgeted costs, or budgeted fixed costs plus budgeted variable costs. Total variable costs are $60,000 [$90,000 (Total costs) - $30,000 (Fixed costs)]. Total variable costs ($60,000) divided by total direct labor hours (10,000) gives the variable cost per unit of $6 per direct labor hour ($60,000/10,000 = $6 per direct labor hour). Response B: The intersection point of $90,000 is total budgeted costs, or budgeted fixed costs plus budgeted variable costs. Total variable costs are $60,000 [$90,000 (Total costs) - $30,000 (Fixed costs)]. Total variable costs ($60,000) divided by total direct labor hours (10,000) gives the variable cost per unit of $6 per direct labor hour ($60,000/10,000 = $6 per direct labor hour). Response C: The intersection point of $90,000 is total budgeted costs, or budgeted fixed costs plus
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/22/2009 for the course BCOR 2000 taught by Professor Brush during the Spring '07 term at Colorado.

Page1 / 4

KA2e_SelfStudy_Ch21 - File:ch21,Chapter21: MultipleChoice 1. a) b) c)usingstaticbudgets d)

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online