Question 1
A cost that remains the same in total even when volume of activity varies is a:
Answer
Fixed cost.
Curvilinear cost.
Variable cost.
Step-wise variable cost.
Standard cost.
10 points
Question 2
A cost that changes in proportion to changes in volume of activity is a(n):
Answer
Differential cost.
Fixed cost.
Incremental cost.
Variable cost.
Product cost.
10 points
Question 3
A cost that changes with volume, but not at a constant rate, is called a:
Answer
Variable cost.
Curvilinear cost.
Step-wise variable cost.
Fixed cost.
Differential cost.
10 points
Question 4
A cost that remains constant over a limited range of volume, but increases by a lump sum when volume increases beyond a maximum amount, is a(n):
Answer
Step-wise cost.
Fixed cost.
Curvilinear cost.
Incremental cost.
Opportunity cost.
10 points
Question 5
A cost that can be separated into fixed and variable components is called a:
Answer
Mixed cost.
Step-variable cost.
Composite cost.
Curvilinear cost.
Differential cost.
10 points
Question 6
Curvilinear costs always increase:
Answer
With decreases in volume.
In constant proportion to changes in production levels.
When management performs break-even analysis.
When volume increases, but not at a constant rate.
On a per unit basis when volume of activity goes down.
10 points
Question 7
Which one of the following statements is not true?
Answer
Total fixed costs remain the same regardless of volume within the relevant range.
Total variable costs change with volume.
Total variable costs decrease as the volume increases.
Fixed costs per unit increase as the volume decreases.
Variable costs per unit remain the same regardless of the volume.
10 points
Question 8
An important tool in predicting the volume of activity, the costs to be incurred, the sales to be earned, and the profit to be received is:
Answer
Target income analysis.
Cost-volume-profit analysis.
Least-squares regression of costs.
Variance analysis.
Process costing.
10 points
Question 9
Select cost information for Winfrey Enterprises is as follows:
Based on this information:
Answer
Both direct materials and rent expense are variable costs.
Utilities expense is a mixed cost and rent expense is a variable cost.
Utilities expense is a mixed cost and rent expense is a fixed cost.
Direct materials is a fixed cost and utilities expense is a mixed cost.
Both direct materials and utilities expense are mixed costs.
10 points
Question 10
A company's normal operating range, which excludes extremely high and low volumes that are not likely to occur, is called the:
Answer
Margin of safety.
Contribution range.
Break-even point.
Relevant range.
High-low point.
10 points
Question 11
A formal statement of future plans, usually expressed in monetary terms, is a:
Answer
Variance report.
Position statement.
Budget.
Prospectus.
Variance analysis.
10 points
Question 12
The process of planning future business actions and expressing them as a formal plan is called:
Answer
Budgeting.
Cost accounting.
Managerial accounting.
Variance analysis.
Standard cost analysis.
10 points
Question 13
For budgets to be effective:
Answer
Goals should be attainable.
Employees affected by a budget should be consulted when it is prepared.
Evaluations should be made carefully with opportunities to explain any failures.
They should be properly applied to avoid negative effects.
All of these.
10 points
Question 14
Which of the following is not a result of following a well-designed budgeting process?
Answer
Improved decision-making processes.
Improved performance evaluations.
Improved coordination of business activities.
Assurance of future profits.
All of these are benefits of effective budgeting.
10 points
Question 15
Which of the following is a benefit derived from budgeting?
Answer
Budgeting focuses management's attention on the future.
Budgeting provides coordination of departments.
Budgeting provides a basis for evaluating performance.
Budgeting provides motivation for managers and employees.
All of these.
10 points
Question 16
Which of the following statements about budgeting is false?
Answer
Budgeting is an aid to planning and control.
Budgets create standards for performance evaluation.
Budgets help coordinate the activities of the entire organization.
Budgeting forces managers to think ahead and formalize long-range objectives.
The master budget should only be prepared by top management.
10 points
Question 17
A budget is best described as:
Answer
A formal statement of a company's future plans usually expressed in monetary terms.
A master control device.
An informal statement of company's future plans usually expressed in monetary terms.
The most crucial component of a company's evaluation process.
The minimum acceptable performance level.
10 points
Question 18
The overall coordinating activity of the budget process is the responsibility of the:
Answer
Chief Accounting Officer.
Chief Executive Officer (CEO).
Chief Financial Officer (CFO).
Budget Committee.
Board of Directors.
10 points
Question 19
The set of periodic budgets that are prepared and periodically revised in the practice of continuous budgeting are called:
Answer
Production budgets.
Sales budgets.
Cash budgets.
Rolling budgets.
Capital expenditures budgets.
10 points
Question 20
Guidance for preparing a master budget is usually the responsibility of:
Answer
The company CEO.
The marketing department.
A budget committee.
The chief financial officer.
Lower level management.
10 points
Answer will be sent by email as attachment.
