Are these all true? need it asap TIA. The objective of setting a transfer price is to motivate managers to behave in a manner that will increase the overall company income. Another advantage of decentralized operations is that assets and expenses may be duplicated across divisions. Service department charges are direct expenses to a profit center. When computing spending variances, actual results are compared to flexible budget?

Are these all true? need it asap TIA. The objective of setting a transfer price is to motivate managers to behave in a manner that will increase the overall company income. Another advantage of decentralized operations is that assets and expenses may be duplicated across divisions. Service department charges are direct expenses to a profit center. When computing spending variances, actual results are compared to flexible budget?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter7: Budgeting

Section: Chapter Questions

Problem 6MC: Which of the following is true in a bottom-up budgeting approach? Every expense needs to be...

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Which of the following is true in a bottom-up budgeting approach? Every expense needs to be justified. Supervisors tell departments their budget amount and the departments are free to work within those amounts. Departments budget their needs however they see fit. Departments determine their needs and relate them to the overall goals.
Match the definition the term. Terms: Cost variance Overhead cost variance Price variance Quantity variance Standard costs Sales budget Production Budget Balanced scorecard Profit center Cost center Definitions: 1. A plan showing the units of goods to be sold and sales to be derived; usually starting pointing the budgeting process. 2. A system of performance measures, including the nonfinancial measures, used to asses manager performance. 3. A department that incurs cost and genrate revenues, such as a selling department 4. The difference between actual and budgeted sales or cost caused by the difference between the actual per unit and the budgeted price per unit. 5. The difference between actual cost and standard cost, made up of a price variance and a quantity variance. 6. The difference between the total overhead cost actually incurred and the total overhead cost applied to products 7. The difference between the actual budgeted cost caused by…
What of the following is NOT a Benefit of Activity Based Management? a.It assists in the budgeting process. b.It aids management in cost cutting and/or cost control and inferentially in product profitability. c.It causes managers to identify non-value added activities and therefore encourages thinking of means of reducing such activities. d.Is more complex than traditional accounting system because it uses multiple cost application rates, one for each activity or cost pool.
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Which of the following techniques would be best for evaluating the management performance of a department that is operated as cost center? Variance analysis Payback method Return on assets ratio Return on investment ratio
Performance reports for cost centers compare actual controllable costs with flexible budget data. total costs with static budget data. total costs with flexible budget data. controllable costs with static budget data.
The following sentences relate to achieving the financial goal of cost minimization. Which of the following statements is FALSE? a. Prioritizing which costs to incur relates to the operating decisions of the firm only.b. Savings is the end product of this financial goal.c. There is a need to determine cost.d. Controling costs involves addressing unfavorable cost variances.
Consider the following statement about the performance reports: 1. Performance reports provide feedbacks to managers and allow them to btter control operations. 2. Many performance reports have budget, actual and variance data 3. Performance reports are often structured around a firms organization hierarchy, that is data relating to lower level units are combined and flow into higher level units Which of the above is (are) true? a. 2 and 3 b. 1 and 2 c. 1 and 3 d. All of the statements are true
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How do budgeted cost rates motivate the support-department manager to improve efficiency?
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