Question 53. (A) Cost centers, profit centers, and investment centers can all be classified as responsibility centers. (B) The terms “direct fixed costs” and “indirect fixed costs” are synonymous with “traceable costs” and “common costs,” respectively. (C) Management by exception means that management will investigate areas where actual results differ from planned results if the items are material and controllable. (D) None of the above Answer: (D) All of the above
Question 56
Question 54. A major element in budgetary controlis: (A) The preparation of long-term plans (B) The comparison of actual results with planned objectives (C) The valuation of inventories (D) Approval of the budget by the stock-holders Answer: (B) The comparison of actual results with planned objectives
Question 55. Budget reports should be prepared (A) Daily (B) Monthly (C) Weekly (D) As frequently as needed Answer: (D) As frequently as needed
On the basis of the budget reports (A) Management analyzes differences between actual and planned results (B) Management may take corrective action (C) Management may modify the future plans (D) All of these Answer: (D) All of these
Question 57. The purpose of the sales budget report is to (A) Control selling expenses (B) Determine whether income objectives are being met (C) Determine whether sales goals are being met (D) Control sales commissions Answer: (C) Determine whether sales goals are being met
Question 58. A static budget (A) Should not be prepared in a company (B) Is useful in evaluating a manager’s performance by comparing actual variable costs and planned variable costs (C) Shows planned results at the original budgeted activity level (D) Is changed only if the actual level of activity is different than originally budgeted Answer: (C) Shows planned results at the original budgeted activity level
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