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Exam 13: Performance Evaluation for Managers

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Question 21

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These were Lakeview Company's budgeted production costs for the current year at an expected output of 20 000 units: Assume Lakeview uses a flexible budgeting system and actually produced 22 000 units at a total cost of $560 000. By how much did actual production cost differ from the flexible budget amount and in which direction?

A) Actual cost was $10 000 over flexible budget
B) Actual cost was $20 000 under flexible budget
C) Actual cost was $20 000 over flexible budget
D) Actual cost was $40 000 under flexible budget

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Question 22

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Which of these factors is the least controllable by the department manager and therefore not his/her main focus of attention?

A) Number of units sold
B) Selling prices
C) Mix of products sold
D) Indirect operating expenses

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Question 23

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Department A has a gross profit of $26 000, direct departmental expenses of $9600 and allocated expenses of $17 000 giving a net loss of $600. What would be the effect on the total organisation's profit if Department A was closed?

If consideration is being given to closing a department a complete analysis should take into account all of the following except:

Busy Beaver allocates advertising expenses to its two departments, A and B, on the basis of sales. For the current year the sales for department A are $800 000 and for department B $200 000 and total advertising expenses are $16 800. The amount allocated to the two departments is:

The method not employed in the establishment of standard costs is:

Management by exception means:

Compute the correct variances: budgeted sales $307 000: actual sales $298 000. actual direct labour $60 000: budgeted direct labour $63 000.

Which of the following is a financial performance measure?

The item, department or job for which costs are accumulated is called a:

Match the following costs with their descriptions. I. Controllable expenses a. Carefully predetermined costs II. Standard costs b. Costs which are eliminated if a department is closed III. Avoidable costs c. Expenses that cannot be directly traced to a cost object IV. Indirect expenses d. Expenses which can be influenced by a manager

A standard cost accounting system can be used for how many of the following costs? Direct materials Direct labour Manufacturing overhead Indirect materials

Bone Dry retailers is considering closing down one of its low-profit departments. Assume that discontinuance of this department will not affect sales of the remaining departments. Which of the cost classifications below should be compared with departmental income to determine whether or not to close the department?

How many of the following could not be cost objects? A product A specialised item of equipment An activity A department

A variable costing income statement is the same as a:

Which of these departments would not be considered a service department for a tyre retailer?

X Company occupies one site and consists of Departments, T, S and Y. Which of these is an example of an indirect cost if Department T is the cost object?

Compute the correct variances: budgeted sales $156 000: actual sales $117 000. Actual direct materials $62 000: budgeted direct materials $51 000.

Which of these departments would not be considered a service department in a restaurant business?

The Corporation has three departments, Widgets, Ridgets and Digits. At the end of the accounting period the following information is available. The Corporation is considering eliminating the Widgets department. What will be the change in The Corporation's profit if the Widgets department is eliminated? Assume that all indirect expenses are unavoidable and that all other circumstances are held constant.