Accounting 207 final exam 2024-2025. Questions and Correct Verified Answers. Graded A+, Exams of Accounting

Download Accounting 207 final exam 2024-2025. Questions and Correct Verified Answers. Graded A+ and more Exams Accounting in PDF only on Docsity! Accounting 207 final exam 2024-2025. Questions and Correct Verified Answers. Graded A+ _______ exists when the actions that maximize the employee's utility are alsothose that maximize the organization's value - ANSGoal Congruence [(Actual quantity - Standard quantity) × Standard price per unit] is the formula for an ______________ variance. - ANSQuantity/usage/efficiency A ____________ is the difference between an actual outcome and a budgeted expectation - ANSvariance A disadvantage of Return on Investment is that it does not adjust for __________. - ANSrisk A firm that lets division managers decide on the price for exchange of products or services between their divisions uses ___________ transfer pricing. - ANSnegotiated A responsibility center where the manager is accountable for revenues and costs given a set of assets is a __________ center. - ANSProfit A responsibility center where the manager is accountable forproducing the required output as efficiently as possible if called a_________ center. - ANSCost/Expense A variance is the difference between ________________ and flexible budget expectations - ANSActual outcomes A variance that indicates net income has increased from the budgeted amount is labeled a ____________ variance. - ANSfavorable All of the following are true regarding variance investigation except: -every variance is investigated. -the investigation should be undertaken only if the anticipated benefits are greater than the expected costs. -managers must consider whether a variance will recur. -variances are not investigated unless they are large enough to be of concern. - ANSevery variance is investigated An advantage of economic value added over residual income is that it removes distortions due to ___________. - ANSGAAP Beginning this year's budget process with a 3% adjustment to lastyear's budget is an example of ____________ budgeting. - ANSIncremental Beginning this year's budgeting process assuming no existing resources is called ________ budgeting. - ANSZero-based Big Blue Corp produces recycling bins for municipal curbside pickup programs. The standard cost sheet for a bin shows 1 hour of direct labor required at a cost of $10.00 per hour. In a recent accounting period, Big Blue Corp recorded 110 hours of direct labor actually worked at an actual cost of $1,100 per hour. The company produced 100 bins during this period. What was the MAGNITUDE of the direct labor efficiency variance? Was Big Blue's direct labor efficiency variance in Question 6 favorable (F) or unfavorable (U)? - ANS100 unfavorable Big Blue Corp produces recycling bins for municipal curbside pickup programs. The standard cost sheet for a bin shows 1 pounds of direct materials required at a cost of $5.00 per pound. In a recent accounting period, Big Blue Corp purchased and used 10 pounds of direct materials at an actual cost of $4.00 per pound and produced 11 recycling bins. What was the MAGNITUDE of the materials price variance? Was Big Blue's materials price variance in Question 6 favorable (F) or unfavorable (U)? - ANS10 favorable Quirky Company makes all of its sales on credit and has the following accounts receivable collection pattern: Cash collected in the month of sale: 25%Cash collected in the month following sale: 75% If credit sales for January and February are $100 and $200, what is the expected cash collection for February? - ANS125 Residual Income is GAAP Operating Income adjusted for the ________________. - ANSopportunity cost of capital Return on Investment is GAAP Operating Income divided by average ______________. - ANSoperating assets T/F: All variances designated "favorable" are good news for a company's performance. - ANSFalse T/F: As the degree of decentralization increases, the consistency of decision-making tends toincrease. - ANSFalse T/F: As the degree of decentralization increases, the speed of decision-making tends to increase. - ANSTrue T/F: Budgets should help create goal congruence - ANSTrue T/F: For an internal transfer, the transfer price represents revenue per unit for the selling division. - ANSTrue T/F: For an internal transfer, the transfer price represents revenue per unit forthe buying division. - ANSFalse T/F: The "SQ" in variance formulas is based on the flexible budget. - ANSTrue T/F: The planning/controlling role of budgeting and the motivating/evaluating role of budgeting arealways in alignment - ANSFalse T/F: The starting point for a flexible budget is the budgeted level of activity. - ANSFalse T/F: Unilateral budgeting is less costly than participative budgeting - ANStrue The ________________ price is the price for the exchange of goods or services between two separate responsibility centers of the same organization. - ANSTransfer The annual operating plan is called the __________ budget. - ANSMaster The degree of _________________ in an organization indicates how much of the decision-making authority is located with front-line managers versus "headquarters" or "corporate." - ANSDecentralization The final component of the operating budget is the _______________ budget. - ANScash The Motivating and Evaluating roles of budgeting create ______________ for employees. - ANSrisk The Planning and Coordinating roles of budgeting want _____________ estimates of resource requirements. - ANSAccurate The plant controller at UWO Lumber Company classified a $20,000 product cost as a period cost, believing this was the correct classification. The company produced 2,000 units of product and sold 1,000 of them during the year. Management is paid a bonus equal to 2% of net income. The plant controller is violating the ___________ standard of the IMA's Statement of Ethical Professional Practice. - ANSCompetence The primary purpose of the cash budget is to help the company avoid _____________. - ANSBankruptcy The pro-forma income statement is part of the ______________ budget, which is one of the two components of the master budget - ANSfinancial The standard formula for a quantity/efficiency variance is the _____ x [AQ - AQ] - ANSstandard price The Standard Labor Hours Allowed is the standard amount of direct labor per unit multiplied by the ______________. - ANSActual Output The Standard Quantity of Materials Allowed is the standard amount of materials per unit multiplied by the ______________. - ANSactual output The variation inherent in a production process is called ___________ cause variation. - ANScommon We should investigate variances when there is evidence that the variance is due to ___________ cause variation in our production process. - ANSspecial When a manager deliberately underestimates revenues or overestimates costs in order to set expectations that are more easily achievable in the coming budget period, the manager has created _________________. - ANSBudgetary Slack When goal congruence exists, the actions that maximize the employee's utility also maximize the organization's ___________. - ANSValue When reporting a variance, you always report a ______________ numerical value. - ANSpositive When top management sets the budget, the process is called ___________ budgeting. - ANSUnilateral/centralized When we use the standard formulas to calculate variable overhead variances, we are really learning about how efficiently we used the _________________. - ANSallocation base Which of the following is NOT one of the four roles of budgeting?