AC 401-9H Cost Accounting Section Exam 3 || Possible Questions
Accurately Answered.
Cash paid for office furniture would be excluded from the cash budget. correct answers False
Budgets force managers to plan for the future. correct answers True
A manager of a profit center is responsible for controlling costs and generating revenues. correct
answers True
Managers can be evaluated based on their divisions' ROI. correct answers True
Flexible budgets are prepared using actual quantities and budgeted rates. correct answers True
Hiring unskilled labor would likely result in an unfavorable efficiency variance. correct answers
True
Ideal standards are considered unrealistic. correct answers True
A residual income of zero would be an indicator of poor performance. correct answers False
A cash budget includes amortization of prepaid expenses. correct answers False
When preparing a flexible budget, total variable costs will increase if sales increase. correct
answers True
Budgeted sales in Allen Company over the next four months are given below:
September: $100,000
October: $160,000
, November: $180,000
December: $120,000
Twenty-five percent of the company's sales are for cash and 75% are on account. Collections for
sales on account follow a stable pattern as follows: 50% of a month's credit sales are collected in
the month of sale, 30% are collected in the month following sale, and 15% are collected in the
second month following sale. The remainder are uncollectible. Given these data, cash collections
for December should be:
A. $138,000
B. $133,500
C. $120,000
D. $103,500 correct answers B. $133,500
Mosbey Inc. is working on its cash budget for June. The budgeted beginning cash balance is
$16,000. Budgeted cash receipts total $188,000 and budgeted cash disbursements total $187,000.
The desired ending cash balance is $40,000. The excess (deficiency) of cash available over
disbursements for June will be:
A. $15,000
B. $1,000
C. $17,000
D. $204,000 correct answers C. $17,000
The materials quantity variance should be computed:
A. based upon the difference between the actual and standard quantity of material used in
production times the actual rate paid for the materials.
B. based upon the amount of materials used in production.
C. based upon the difference between the actual and standard prices per unit times the actual
quantity used.
D. only when there is a difference between standard and actual cost per unit for the materials.
correct answers B. based upon the amount of materials used in production.
Accurately Answered.
Cash paid for office furniture would be excluded from the cash budget. correct answers False
Budgets force managers to plan for the future. correct answers True
A manager of a profit center is responsible for controlling costs and generating revenues. correct
answers True
Managers can be evaluated based on their divisions' ROI. correct answers True
Flexible budgets are prepared using actual quantities and budgeted rates. correct answers True
Hiring unskilled labor would likely result in an unfavorable efficiency variance. correct answers
True
Ideal standards are considered unrealistic. correct answers True
A residual income of zero would be an indicator of poor performance. correct answers False
A cash budget includes amortization of prepaid expenses. correct answers False
When preparing a flexible budget, total variable costs will increase if sales increase. correct
answers True
Budgeted sales in Allen Company over the next four months are given below:
September: $100,000
October: $160,000
, November: $180,000
December: $120,000
Twenty-five percent of the company's sales are for cash and 75% are on account. Collections for
sales on account follow a stable pattern as follows: 50% of a month's credit sales are collected in
the month of sale, 30% are collected in the month following sale, and 15% are collected in the
second month following sale. The remainder are uncollectible. Given these data, cash collections
for December should be:
A. $138,000
B. $133,500
C. $120,000
D. $103,500 correct answers B. $133,500
Mosbey Inc. is working on its cash budget for June. The budgeted beginning cash balance is
$16,000. Budgeted cash receipts total $188,000 and budgeted cash disbursements total $187,000.
The desired ending cash balance is $40,000. The excess (deficiency) of cash available over
disbursements for June will be:
A. $15,000
B. $1,000
C. $17,000
D. $204,000 correct answers C. $17,000
The materials quantity variance should be computed:
A. based upon the difference between the actual and standard quantity of material used in
production times the actual rate paid for the materials.
B. based upon the amount of materials used in production.
C. based upon the difference between the actual and standard prices per unit times the actual
quantity used.
D. only when there is a difference between standard and actual cost per unit for the materials.
correct answers B. based upon the amount of materials used in production.
