Managerial Accounting (5th Edition)
5th Edition
ISBN: 9780134128528
Author: Karen W. Braun, Wendy M. Tietz
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Textbook Question
Chapter 10, Problem 10.15SE
Use vocabulary terms (Learning Objectives 1, 2, 3, 4, 5, & 6)
Complete the following statements with one of the terms listed here. You may use a term more than once. Some terms may not be used at all.
Capital turnover | Direct fixed expenses | Flexible |
Key performance indicators (KPIs) | Profit center | Sales margin |
Common fixed expenses | Favorable variance | Goal congruence |
Management by exception | Unfavorable variance | |
Cost center | Flexible budget | Investment center |
Revenue center | Volume variance |
- a. Fixed expenses that can be traced to the segment are called __________.
- b. __________ shows how much income is generated for every $1.00 of sales.
- c. __________ are included on balanced scorecards and help managers assess how well the company’s objectives are being met.
- d. The difference between actual results and the master budget is called the __________.
- e. When the goals of the segment managers in a company are the same, then __________ is achieved.
- f. The local branch office of a national bank is considered to be a(n) __________.
- g. Fixed expenses that cannot be traced to the segment are called __________.
- h. A(n) __________is a budget prepared for a different volume level than that which was originally anticipated.
- i. The difference between the flexible budget and actual results is called the __________.
- j. __________measures the profitability of a division relative to the size of its assets.
- k. If budgeted salary expense is higher than the actual salary expense, then a(n) __________will result.
- l. A(n) __________manager is responsible for generating revenue.
- m. The __________arises only because the actual volume sold differs from the volume originally anticipated in the master budget.
- n. __________shows how much sales revenue is generated with every $1.00 of assets.
- ○. If budgeted sales revenue is greater than the actual sales revenue, then a(n) __________will result.
- p. __________is a management technique in which managers only investigate budget variances that are relatively large.
- q. The legal department of a manufacturer is considered to be a(n) __________.
- r. The headquarters for an international consulting firm is considered to be a(n) __________.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Estimating the effects of changes in budget assumptions, such as determining the impact of an increase or decrease in sales, is called:
Question 4 options:
static budget analysis.
sensitivity analysis.
variance analysis,
cost reduction analysis.
(Ch 10) An advantage of a flexible budget is that it:
Question 5 options:
allows comparison of actual costs to master (static) budget costs.
considers only variable costs.
allows comparisons of actual costs to the costs that should have been incurred, given the level of sales.
allows management freedom in meeting profitability goals.
Indicate whether the item below is used as key performance indicators for the areas of (A) Financial, (B) Customer, (C) Internal Process, or (D) Learning and Growth performance. Choose the one best choice.
Quantity variance on a cost report *(A) Financial(B) Customer(C) Internal Process(D) Learning and Growth performance.
Activity flexible budgeting differs from traditional approaches by using more than ____________ drivers to predict costs.
Chapter 10 Solutions
Managerial Accounting (5th Edition)
Ch. 10 - (Learning Objective 1) Companies often...Ch. 10 - (Learning Objective 1) Which of the following is...Ch. 10 - (Learning Objective 1) In terms of responsibility...Ch. 10 - (Learning Objective 2) Which of the following is...Ch. 10 - (Learning Objective 2) A segment margin is the...Ch. 10 - Prob. 6QCCh. 10 - Prob. 7QCCh. 10 - Prob. 8QCCh. 10 - Prob. 9QCCh. 10 - Prob. 10QC
Ch. 10 - Identify and understand responsibility centers...Ch. 10 - Identify types of responsibility centers (Learning...Ch. 10 - Identify centralized and decentralized...Ch. 10 - Prob. 10.4SECh. 10 - Prob. 10.5SECh. 10 - Prob. 10.6SECh. 10 - Calculate ROI (Learning Objective 3) Refer to Epic...Ch. 10 - Prob. 10.8SECh. 10 - Prob. 10.9SECh. 10 - Prob. 10.10SECh. 10 - Prob. 10.11SECh. 10 - Interpret a performance report (Learning Objective...Ch. 10 - Prob. 10.13SECh. 10 - Classify KPIs by balanced scorecard perspective...Ch. 10 - Use vocabulary terms (Learning Objectives 1, 2, 3,...Ch. 10 - Prob. 10.16SECh. 10 - Identify type of responsibility center (Learning...Ch. 10 - Complete and analyze a performance report...Ch. 10 - Prepare a segment margin performance report...Ch. 10 - Compute and interpret the expanded ROI equation...Ch. 10 - Prob. 10.21AECh. 10 - Prob. 10.22AECh. 10 - Comparison of ROI and residual income (Learning...Ch. 10 - Prob. 10.24AECh. 10 - Comprehensive flexible budget problem (Learning...Ch. 10 - Prepare a flexible budget performance report...Ch. 10 - Work backward to find missing values (Learning...Ch. 10 - Construct a balanced scorecard (Learning Objective...Ch. 10 - Sustainability and the balanced scorecard...Ch. 10 - Identify type of responsibility center (Learning...Ch. 10 - Complete and analyze a performance report...Ch. 10 - Prob. 10.32BECh. 10 - Prob. 10.33BECh. 10 - Prob. 10.34BECh. 10 - Prob. 10.35BECh. 10 - Prob. 10.36BECh. 10 - Prob. 10.37BECh. 10 - Prob. 10.38BECh. 10 - Prob. 10.39BECh. 10 - Prob. 10.40BECh. 10 - Prob. 10.41BECh. 10 - Sustainability and the balanced scorecard...Ch. 10 - Prepare a budget with different volumes for...Ch. 10 - Prepare and interpret a performance report...Ch. 10 - Prob. 10.45APCh. 10 - Prob. 10.46APCh. 10 - Prob. 10.47APCh. 10 - Evaluate subunit performance (Learning Objectives...Ch. 10 - Prob. 10.49BPCh. 10 - Prob. 10.50BPCh. 10 - Evaluate divisional performance (Learning...Ch. 10 - Prob. 10.52BPCh. 10 - Determine transfer price at a manufacturer under...Ch. 10 - Evaluate subunit performance (Learning Objectives...Ch. 10 - Prob. 10.55SC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- 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…arrow_forwardb) ‘Budgeting has a number of different purposes including: Planning; Control; Performance evaluation; Motivation. Some managers believe that zero-based budget is more beneficial than other types of the budget for firms.’ Required: Critically discuss the above statement with reference to academic literature. In your discussion, you should refer to the budgeting systems you learned in this module.arrow_forwardManagement Accounting Question (Qualitative Short Answer) a. Why is the sales forecast the starting point in budgeting? b. What is a perpetual budget? c. Which is a better basis for evaluating actual results: budgeted performance or past performance? Why? d. The materials price variance can be computed at what two different points in time? Which point is better and why? e. What effect, if any, would you expect purchasing poor-quality materials to have on direct labor variances? f. Distinguish between ideal and practical standards. g. Costs associated with the quality of conformance can be broken down into four broad groups. What are these four groups and how do they differ? h. What is likely the most effective way to reduce a company's total quality costs? i. What are the three main uses of quality cost reports?arrow_forward
- Brabham Enterprises manufactures tires for the Formula I motor racing circuit. For August 2020, it budgeted to manufacture and sell 3,000 tires at a variable cost of $73 per tire and total fixed costs of $57,000. The budgeted selling price was $111 per tire. Actual results in August 2020 were 2,700 tires manufactured and sold at a selling price of $113 per tire. The actual total variable costs were $218,700, and the actual total fixed costs were $53,500. Read the requirements Requirement 1. Prepare a performance report with a flexible budget and a static budget Begin with the actual results, then complete the flexible budget columns and the static budget columns. Label each variance as favorable or unfavorable. (For variances with a 10 balance, make sure to enter "0" in the appropriate field. If the variance is zero, do not select a label) Units sold Revenues Variable costs Contribution margin Fixed costs Operating income Actual Resultsarrow_forwardIndicate whether the items below are used as key performance indicators for the areas Quantity variance on a cost report *(A) Financial(B) Customer(C) Internal Process(D) Learning and Growth performance.arrow_forwardFocusing on improving the activities that are showing significant differences between budgeted and actual results is: A.quantifying plans B.management by exception C.cash management D.creating benchmarksarrow_forward
- Practice 3 : a) Explain the importance of incentive systems for motivating performance. b) Identify and explain the components of management compensation and the tradeoffs that compensation designers make. c) What is meant by the term flexible budget? What role do flexible budgets play in evaluating performance?arrow_forwardCompare flexible budget system from traditional budget system, which is the better system for performance analysis?arrow_forwardLook up the definitions for the following terms: Budget (Budgeting) Capital budget (Capital Budgeting Decisions) Balanced scorecard (Balanced Scorecard and Other Performance Measures) Break-Even point (Cost Volume Profit Analysis) Provide examples of how each of these terms is used in your own life and how using these practices is useful.arrow_forward
- Which of the following is not a part of budgeting? A. planning B. finding bottlenecks C. providing performance evaluations D. preventing net operating lossesarrow_forward1. Describe the difference between a static and a flexible budget 2. Outline how often businesses must report GST 3. Describe a method that can be used to evaluate a budget or financial plan.arrow_forwardWhich of the following is not a part of budgeting?A. planningB. finding bottlenecksC. providing performance evaluationsD. preventing net operating lossesarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax CollegeCornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
Responsibility Accounting| Responsibility Centers and Segments| US CMA Part 1| US CMA course; Master Budget and Responsibility Accounting-Intro to Managerial Accounting- Su. 2013-Prof. Gershberg; Author: Mera Skill; Rutgers Accounting Web;https://www.youtube.com/watch?v=SYQ4u1BP24g;License: Standard YouTube License, CC-BY