53. Which of the following is not typically a responsibility centre for a manufacturing firm?
A. Cost centre
B. Profit centre
C. Investment centre
D. Inventory centre
Learning Objective: 9.03 Understand how budgets are d
Chapter 09 Testbank Key
1. The budget is:
A. a short-term plan.
B. more detailed than a strategic plan.
C. not influenced by strategic decisions.
D. a short-term plan AND more detailed than a strategic plan.
Budgeted sales for ABC Company are as follows:
All stock is marked up to sell at its invoice cost plus 25 per cent. On average 60 per cent of credit sales are collected in the month of
sale, 35 per cent in the month following sale and the remainder is
92. Explain how practical standards the attitude of managers and their willingness to commit to the set standards.
Standards that are challenging but are expected to be attained are called practical (or attainable) standards. These
standards assume a prod
78. A strategic business unit is:
A. a cost centre.
B. either a revenue centre or a profit centre.
C. either a revenue centre or an investment centre.
D. either a profit centre or an investment centre.
79. Senior managers use performance measures to:
Which of the following is used in the calculation of the variable overhead spending variance?
Flexible budget based on
40. When employees throughout an organisation are meaningfully involved in the budget-setting process, this is referred to
A. budgeting slack.
B. participative budgeting.
C. padding the budget.
D. employee-based budgeting.
3. Which of the following statements is true?
A. In a standard costing system, standard costs can only be used for cost control.
B. In a standard costing system, standard costs can only be used for product costing.
C. In a standard costing system, standar
80. Zero-based budgeting is too introspective. Discuss this statement.
When managers focus on their own part of the business, they can overlook the interactions with other departments and the
relevance of their operations to overall business objectives an
Corporate policy at Weber Pty Ltd requires that all transfers between divisions be recorded at variable cost as a transfer price. Divisional
managers have complete autonomy in choosing their sources of customers and suppliers. The Milling Division sel
57. Which of the following might you expect to see being used as a performance measure for a cost centre?
A. Return on investment
B. Actual business unit profit compared with budget business unit profit
C. Standard cost variances
D. All of the given answe
66. A department's budgeted output for a 4-week period was 500 units at a standard cost of $100 per unit. The actual
production was 450 units and the firm's ledger revealed actual costs for the month to be $50 200. The standard production
cost for the per
10. Overhead application refers to
A. the addition of overhead cost to work in process inventory as a product cost.
B. a system of allocating manufacturing cost to products.
C. static budget applications.
D. Both the addition of overhead cost to work in p
The following information was taken from the business united profit and loss statement of Resell Real Estate Agents for 2014:
In addition, the company incurred common fixed costs of $18 000. What was the business unit margin of the Tamworth Division d