Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN: 9781337115773
Author: Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher: Cengage Learning
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Chapter 9, Problem 16MCQ
To determine
Identify the option which is an example of myopic behavior.
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2. What are some possible drawbacks to using standard costs that Sarah might consider?
a. Standards limit operating improvements because employees may be discouraged from improving beyond the standards.
b. Standards may become “stale” in a dynamic manufacturing environment.
c. Employees may focus only on efficiency improvement and their own operations rather than considering the larger objectives of the organization.
d. Since standards are impossible to attain, they are a distraction from the work at hand.
e. Since standards never change, they do not reflect reality.
2. What are some possible drawbacks to using standard costs that Sarah might consider?
a. Standards limit operating improvements because employees may be discouraged from improving beyond the standards.
b. Standards may become “stale” in a dynamic manufacturing environment.
c. Employees may focus only on efficiency improvement and their own operations rather than considering the larger objectives of the organization.
d. Since standards are impossible to attain, they are a distraction from the work at hand.
e. Since standards never change, they do not reflect reality.
Answers
a, b and c
b, c and d
c, d and e
a, d and e
b, d and e
Stricter rules for health, environment and safety (HSE) lead to:
Â
a Reduced employment because taxes must be increased to pay for HSE measures
b. Reduced employment because it becomes more expensive for companies to hire people
c. Increase employment because there will be fewer accidents and thus fewer work-related injuries
d. Increase employment because HSE leads to new work tasks that require extra employees
Chapter 9 Solutions
Managerial Accounting: The Cornerstone of Business Decision-Making
Ch. 9 - Define the term budget. How are budgets used in...Ch. 9 - Prob. 2DQCh. 9 - Explain how both small and large organizations can...Ch. 9 - Prob. 4DQCh. 9 - What is a master budget? An operating budget? A...Ch. 9 - Explain the role of a sales forecast in budgeting....Ch. 9 - All budgets depend on the sales budget. Is this...Ch. 9 - Why is goal congruence important?Ch. 9 - Why is it important for a manager to receive...Ch. 9 - What is participative budgeting? Discuss some of...
Ch. 9 - A budget too easily achieved will lead to...Ch. 9 - Explain why a manager has an incentive to build...Ch. 9 - Discuss the differences between static and...Ch. 9 - Explain why mixed costs must be broken down into...Ch. 9 - What is the purpose of a before-the-fact flexible...Ch. 9 - Prob. 1MCQCh. 9 - Which of the following is part of the control...Ch. 9 - Which of the following is not an advantage of...Ch. 9 - The budget committee a. reviews the budget. b....Ch. 9 - A moving, 12-month budget that is updated monthly...Ch. 9 - Which of the following is not part of the...Ch. 9 - Before a direct materials purchases budget can be...Ch. 9 - The first step in preparing the sales budget is to...Ch. 9 - Which of the following is needed to prepare the...Ch. 9 - A company requires 100 pounds of plastic to meet...Ch. 9 - A company plans to sell 220 units. The selling...Ch. 9 - Select the one budget below that is not an...Ch. 9 - A company has the following collection pattern:...Ch. 9 - The percentage of accounts receivable that is...Ch. 9 - Which of the following is not an advantage of...Ch. 9 - Prob. 16MCQCh. 9 - For performance reporting, it is best to compare...Ch. 9 - To create a meaningful performance report, actual...Ch. 9 - To help assess performance, managers should use a...Ch. 9 - A firm comparing the actual variable costs of...Ch. 9 - Preparing a Sales Budget Patrick Inc. sells...Ch. 9 - Preparing a Production Budget Patrick Inc. makes...Ch. 9 - Preparing a Direct Materials Purchases Budget...Ch. 9 - Preparing a Direct Labor Budget Patrick Inc. makes...Ch. 9 - Preparing an Overhead Budget Patrick Inc. makes...Ch. 9 - Preparing an Ending Finished Goods Inventory...Ch. 9 - Preparing a Cost of Goods Sold Budget Andrews...Ch. 9 - Preparing a Selling and Administrative Expenses...Ch. 9 - Preparing a Budgeted Income Statement Oliver...Ch. 9 - Preparing a Schedule of Cash Collections on...Ch. 9 - Preparing an Accounts Payable Schedule Wight Inc....Ch. 9 - Preparing a Cash Budget La Famiglia Pizzeria...Ch. 9 - Flexible Budget with Different Levels of...Ch. 9 - Performance Report Based on Budgeted and Actual...Ch. 9 - Preparing a Sales Budget Tulum Inc. sells powdered...Ch. 9 - Preparing a Production Budget Tulum Inc. makes a...Ch. 9 - Preparing a Direct Materials Purchases Budget...Ch. 9 - Preparing a Direct Labor Budget Tulum Inc. makes a...Ch. 9 - Preparing an Overhead Budget Tulum Inc. makes a...Ch. 9 - Prob. 40BEBCh. 9 - Preparing a Cost of Goods Sold Budget Lazlo...Ch. 9 - Preparing a Selling and Administrative Expenses...Ch. 9 - Preparing a Budgeted Income Statement Jameson...Ch. 9 - Preparing a Schedule of Cash Collections on...Ch. 9 - Pilsner Inc. purchases raw materials on account...Ch. 9 - Preparing a Cash Budget Olivers Bistro provided...Ch. 9 - Flexible Budget with Different Levels of...Ch. 9 - Performance Report Based on Budgeted and Actual...Ch. 9 - Planning and Control a. Dr. Jones, a dentist,...Ch. 9 - Use the following information for Exercises 9-50...Ch. 9 - Prob. 51ECh. 9 - Production Budget and Direct Materials Purchases...Ch. 9 - Production Budget Aqua-Pro Inc. produces...Ch. 9 - Direct Materials Purchases Budget Langer Company...Ch. 9 - Direct Labor Budget Evans Company produces asphalt...Ch. 9 - Sales Budget Alger Inc. manufactures six models of...Ch. 9 - Production Budget and Direct Materials Purchases...Ch. 9 - Schedule of Cash Collections on Accounts...Ch. 9 - Schedule of Cash Collections on Accounts...Ch. 9 - Cash Payments Schedule Fein Company provided the...Ch. 9 - Cash Budget The owner of a building supply company...Ch. 9 - Flexible Budget for Various Levels of Production...Ch. 9 - Use the following information for Exercises 9-63...Ch. 9 - Use the following information for Exercises 9-63...Ch. 9 - Prob. 65PCh. 9 - Operating Budget, Comprehensive Analysis Allison...Ch. 9 - Use the following information for Problems 9-67...Ch. 9 - Use the following information for Problems 9-67...Ch. 9 - Use the following information for Problems 9-67...Ch. 9 - Ryan Richards, controller for Grange Retailers,...Ch. 9 - Participative Budgeting, Not-for-Profit Setting...Ch. 9 - Cash Budget The controller of Feinberg Company is...Ch. 9 - Optima Company is a high-technology organization...Ch. 9 - Direct Materials and Direct Labor Budgets Willison...Ch. 9 - Prob. 75PCh. 9 - Prob. 76CCh. 9 - Prob. 77CCh. 9 - Budgetary Performance, Rewards, Ethical Behavior...
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- Which of the following is not a consideration when a manager is deciding to discontinue a product or product line? Â Â Whether the product has a positive or negative contribution margin. Â Â Determining if direct fixed costs could be avoided if the product or product line is discontinued. Â Â If discontinuing the product or product line will affect sales of remaining products. Â Â Not having any free capacity.arrow_forwardWhich of the following explains why managers compare the budgeted costs to actual costs? Â a. Managers only focus on the budgeted costs and infrequently compare these with actual costs. b. Managers only want to know how well they did to control costs. c. Managers never compare budgeted costs to actual costs. d. Managers evaluate how well they did to control costs and learn how to do better in the future. e. Managers only want to learn how to make better decisions in the future.arrow_forwardWhich one of the following would be considered a financial cost of organizational control? The cost of failing to recognize opportunities to increase sales due to data loss. The cost of having financial statements audited by an independent accounting firm. The cost of an upset customer who leaves the store because it took too long for a manager to approve a price adjustment for a customer farther up in the line.arrow_forward
- 5. Which of the following statements concerning ideal standards is incorrect?  a)Ideal standards may be better than practical standards when managers seek continual improvement  b)Ideal standards do not make allowances for waste, spoilage, and machine breakdowns  c)Ideal standards generally do not provide the best motivation for workers.  d)Ideal standards are better suited for cash budgeting than practical standardsarrow_forwardClassify each of the following as a problem or a symptom. If it is a symptom, give two examples of a possible underlying problem. If it is a problem, give two examples of a possible symptom that may be detected.a. declining profitsb. defective production processc. low-quality raw materialsd. shortfall in cash balancee. declining market sharef. shortage of employees in the accounts payabledepartmentg. shortage of raw material due to a drought in the Midwesth. inadequately trained workersi. decreasing customer satisfactionarrow_forwardWhich of the following is NOT a problem associated with standard cost accounting? a. Standard costing motivates management to produce large batches of products and build inventory. b. Applying standard costing leads to product cost distortions in a lean environment. c. Standard costing data are associated with excessive time lags that reduce its usefulness. d. The financial orientation of standard costing may promote bad decisions. e. All of the above are problems with standard costing.arrow_forward
- These are measures not found in the chart of accounts, such as customer satisfaction scores or product quality measures. A. Quality measures B. Non-financial measures C. Financial Measures D. Balanced Scorecard A manager would like to see reduction of the following operational measures, except: A. Spoilage B. Number of customer complaints C. Queue time D. Manufacturing Efficiencyarrow_forwardWhat does a consistently negative responsibility marginimply will happen to the operating income of the business ifthe center is closed? Why? Identify several other factors thatshould be considered in deciding whether or not to close thecenter.arrow_forwardWhat 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.arrow_forward
- Prepare a report from Mary Jane to Don explaining how these changes will affect Mirabel’s overall cost structure. For those changes that are controllable, make a recommendation considering the uncontrollable cost changes. Be certain to consider not only the company’s break-even point, but also the desired margin of safety.arrow_forwardWhich of the following is false regarding activity-based costing (ABC)?   a. Companies that have a high potential for cost distortions are more likely to benefit from ABC    b. Opportunities for continuous improvement are rarely revealed by using ABC.    c. The cost of implementing ABC may outweigh the benefits    d. Increased accuracy with budgeting resources is often realizedarrow_forwardwhen backflush costing is used, managers generally do not use which of the following to keep tract of operation?  a. complex costing b. computer monitoring c. non financial measures d. personal observationsarrow_forward
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