cost final exam

Cost final exam - Which of the following is not a characteristic of a decentralized organization More decisions made by relatively few individuals

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Which of the following is not a characteristic of a decentralized organization? More decisions made by relatively few individuals. An operating unit of an organization is called an investment center if it is responsible for investments in assets. An operating unit that is responsible for revenues and costs is commomly referred to as a/an profit center. The controllability concept states that managers should be held responsible for all items over which they have decision- making authority. Which of the following items would not be classified as a contingent compensation item? Administrative salaries. In developing a master budget for a manufacturing company, which one of the following items should be done first? Development of a sales budget. The number of units required for production is equal to budgeted sales plus units in the ending inventory minus the units in the beginning inventory. Selana Company’s total assets of operating five sales offices last year were $500,000, of which $70,000 represented fixed costs. Selana has determined that total costs are significantly influenced by the number of sales offices operated. Last year’s costs and number of sales offices can be used as the basis for predicting annual costs. What would be the budgeted cost for the coming year if Selana were to operate seven sales offices (CPA adapted) $672,000 (500,000-70,000)/5= $86,000; (86,000*7) +70,000=672,000 Research has shown that having several levels of management participate in the budgetary process is beneficial to both the company and the employees. However, there are certain behavioral problems encountered in the process, one of which is the use of budgetary slack. From the perspective of corporate management, the use of budgetary slack increases the likelihood of inefficient resource allocation. Which of the following is the most probable reason a company would experience an unfavorable labor rate variance and a favorable labor efficiency variance the mix of workers assigned to the particular job was heavily weighted towards the use of higher paid experienced individuals. In general, the direct labor efficiency variance is the responsibility of the production manager. The Redrock Company uses flexible budgeting for cost control. Redrock produced 10,800 units of the product during October, incurring indirect material costs of $13,000. Its master budget for the reflected indirect material costs of $180,000 at a production volume of 144,000 units. What was the flexible budget variance for the indirect material costs in October? $500favorable (180,000/144,000) X 10,800= 13500-13000= 500 favorable. Blue Company produces Trivets. Based on its master budget, the company should produce 1,000 Trivets each month, working 2500 direct labor hours. During May, only 900 Trivets were produced. The company worked 2400 direct labor hours. The standard hours allowed for May production would be 2,250 hours 2500/1000= 2.5 hours per unit; 2.5x900= 2250 In analyzing company operations,
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This note was uploaded on 12/15/2010 for the course ACCT 213 taught by Professor Vinciguerra during the Spring '10 term at Moravian.

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Cost final exam - Which of the following is not a characteristic of a decentralized organization More decisions made by relatively few individuals

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