1.
Which of the following is NOT a responsibility center?
A
Cost center
B
Revenue center
C
Profit center
D
None of the above (all are responsibility centers)
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Which of the following is NOT a responsibility center?
Cost center
Revenue center
Profit center
None of the above (all are responsibility centers)
The difference between actual and budgeted performance is called a:
Variance
Deviation
Discrepancy
Anomaly
What is the difference between efficiency and effectiveness?
Efficiency is doing things right, while effectiveness is doing the right things
Efficiency is achieving goals, while effectiveness is using resources wisely
Efficiency is measured in financial terms, while effectiveness is measured in non-financial terms
Efficiency is important for short-term success, while effectiveness is important for long-term success
What is the purpose of a performance measurement system?
To track and evaluate organizational performance
To set goals for future performance
To motivate employees
All of the above
What is the purpose of a cost of quality report?
To track the costs associated with preventing, detecting, and correcting defects
To measure customer satisfaction
To evaluate employee performance
To set the selling price of a product
What is an unfavorable variance?
A variance that decreases profit
A variance that increases profit
A variance that has no effect on profit
A variance that is caused by internal factors
What is a favorable variance?
A variance that increases profit
A variance that decreases profit
A variance that has no effect on profit
A variance that is caused by external factors
A budget that is continuously updated by adding a new period and dropping the most recent period is called a:
Master budget
Flexible budget
Rolling budget
Zero-based budget
What is the purpose of variance analysis?
To identify the causes of deviations from budgeted amounts
To measure the profitability of a product
To evaluate the performance of a department
To set the selling price of a product
What is a zero-based budget?
A budget that starts from scratch each year
A budget that is based on the previous year's budget
A budget that is based on actual results
A budget that is based on industry averages
What is a rolling budget?
A budget that is continuously updated by adding a new period and dropping the most recent period
A budget that is prepared for a specific period of time
A budget that is prepared for a specific project
A budget that is prepared for a specific activity
What is the purpose of a master budget?
To provide an overall plan for the organization
To plan for a specific department
To plan for a specific project
To plan for a specific activity
What is the difference between a budget and a forecast?
A budget is a plan for the future, while a forecast is a prediction of the future
A budget is prepared for a specific period of time, while a forecast is prepared for an indefinite period
A budget is used for internal purposes, while a forecast is used for external purposes
A budget is more detailed than a forecast
What is a sunk cost?
A cost that has already been incurred and cannot be recovered
A cost that is expected to be incurred in the future
A cost that is relevant to a decision
A cost that is irrelevant to a decision
What is the purpose of a cost-benefit analysis?
To compare the costs and benefits of a decision
To determine the profitability of a product
To evaluate the performance of a department
To set the selling price of a product
What is a cost pool?
A grouping of individual costs
A method of allocating costs
A type of budget
A performance measurement tool
Which of the following is NOT a type of costing system?
Job order costing
Process costing
Target costing
Marginal costing
What is the internal rate of return (IRR) of an investment?
The discount rate that makes the net present value of an investment equal to zero
The discount rate that makes the payback period of an investment equal to zero
The discount rate that makes the profitability index of an investment equal to one
The discount rate that is used to calculate the present value of an investment's future cash flows
Which of the following is a period cost?
Direct materials
Direct labor
Manufacturing overhead
Administrative expenses
What is the net present value (NPV) of an investment?
The present value of an investment's future cash flows minus its initial cost
The future value of an investment's future cash flows minus its initial cost
The internal rate of return of an investment
The payback period of an investment