311. Villanova, Inc., has done a cost analysis for its production of rubber stamps. The following activities and cost drivers have been developed:
Activity Cost Formula
Design $5,000 + $0.05 per machine hour
Machining $25,000 + $0.01 per machine hour
Setups $35 per batch
Purchasing $50 + $15 per purchase order
Following are the actual costs of producing 35,000 rubber stamps: 1,000 machine hours; 5 batches; 30 purchase orders
Design $5,080
Machining ?
Setups ?
Purchasing $600
The following variances were given in the activity performance report:
Design ?
Machining $40 F
Setups $15 F
Purchasing ?
What is the activity variance for design?
a. $40 F
b. $30 U
c. $15 F
d. d. $100 U
Actual $5,080
Budget $5,000 + (1,000 × $0.05) 5,050
Variance $ 30 U
312. Villanova, Inc., has done a cost analysis for its production of rubber stamps. The following activities and cost drivers have been developed:
Activity Cost Formula
Design $5,000 + $0.05 per machine hour
Machining $25,000 + $0.01 per machine hour
Setups $35 per batch
Purchasing $50 + $15 per purchase order
Following are the actual costs of producing 35,000 rubber stamps: 1,000 machine hours; 5 batches; 30 purchase orders
Design $5,080
Machining ?
Setups ?
Purchasing $600
The following variances were given in the activity performance report:
Design ?
Machining $40 F
Setups $15 F
Purchasing ?
What is the activity variance for purchasing?
a. $500 U
b. $100 U
c. $50 U
d. none of these
Actual $600
Budget $50 + (30 × $15) 500
Variance $100 U
313. Goal congruence means
a. there is alignment of organizational and managerial goals
b. the organization is aligned to the needs of the environment
c. the organization is aligned to shareholder goals
d. there is no divergence between organization and stockholder goals
314. The ideal budget system creates
a. extreme caution in managers
b. drive and risk avoidance in managers
c. drive and goal congruence in managers
d. none of these
315. When budgets are used to evaluate performance, which factor might NOT have a significant behavioral effect?
a. concern for status
b. concern for financial matters
c. concern for career
d. concern for company profit
316. Analysis that fosters management by exception is
a. value analysis
b. process analysis
c. sensitivity analysis
d. variance analysis
317. When the reaction to a budget is negative, resulting in managerial behavior that is negative for the organization, the resulting behavior is known as
a. dysfunctional behavior
b. psychopathic behavior
c. congruent behavior
d. sociopathic behavior
318. Which of the following is NOT a key feature of an ideal budgetary system?
a. participation
b. incentives
c. accountability for noncontrollable costs
d. feedback on performance
319. Which of the following is NOT a key feature of an ideal budgetary system?
a. controllable costs
b. single measure for performance
c. incentives
d. frequent feedback
320. Which of the following is NOT an advantage of participative budgeting?
a. encourages incrementalism
b. encourages communication
c. encourages responsibility
d. encourages creativity
Activity Cost Formula
Design $5,000 + $0.05 per machine hour
Machining $25,000 + $0.01 per machine hour
Setups $35 per batch
Purchasing $50 + $15 per purchase order
Following are the actual costs of producing 35,000 rubber stamps: 1,000 machine hours; 5 batches; 30 purchase orders
Design $5,080
Machining ?
Setups ?
Purchasing $600
The following variances were given in the activity performance report:
Design ?
Machining $40 F
Setups $15 F
Purchasing ?
What is the activity variance for design?
a. $40 F
b. $30 U
c. $15 F
d. d. $100 U
Actual $5,080
Budget $5,000 + (1,000 × $0.05) 5,050
Variance $ 30 U
312. Villanova, Inc., has done a cost analysis for its production of rubber stamps. The following activities and cost drivers have been developed:
Activity Cost Formula
Design $5,000 + $0.05 per machine hour
Machining $25,000 + $0.01 per machine hour
Setups $35 per batch
Purchasing $50 + $15 per purchase order
Following are the actual costs of producing 35,000 rubber stamps: 1,000 machine hours; 5 batches; 30 purchase orders
Design $5,080
Machining ?
Setups ?
Purchasing $600
The following variances were given in the activity performance report:
Design ?
Machining $40 F
Setups $15 F
Purchasing ?
What is the activity variance for purchasing?
a. $500 U
b. $100 U
c. $50 U
d. none of these
Actual $600
Budget $50 + (30 × $15) 500
Variance $100 U
313. Goal congruence means
a. there is alignment of organizational and managerial goals
b. the organization is aligned to the needs of the environment
c. the organization is aligned to shareholder goals
d. there is no divergence between organization and stockholder goals
314. The ideal budget system creates
a. extreme caution in managers
b. drive and risk avoidance in managers
c. drive and goal congruence in managers
d. none of these
315. When budgets are used to evaluate performance, which factor might NOT have a significant behavioral effect?
a. concern for status
b. concern for financial matters
c. concern for career
d. concern for company profit
316. Analysis that fosters management by exception is
a. value analysis
b. process analysis
c. sensitivity analysis
d. variance analysis
317. When the reaction to a budget is negative, resulting in managerial behavior that is negative for the organization, the resulting behavior is known as
a. dysfunctional behavior
b. psychopathic behavior
c. congruent behavior
d. sociopathic behavior
318. Which of the following is NOT a key feature of an ideal budgetary system?
a. participation
b. incentives
c. accountability for noncontrollable costs
d. feedback on performance
319. Which of the following is NOT a key feature of an ideal budgetary system?
a. controllable costs
b. single measure for performance
c. incentives
d. frequent feedback
320. Which of the following is NOT an advantage of participative budgeting?
a. encourages incrementalism
b. encourages communication
c. encourages responsibility
d. encourages creativity
