Managerial Accounting
3rd Edition
ISBN: 9780077826482
Author: Stacey M Whitecotton Associate Professor, Robert Libby, Fred Phillips Associate Professor
Publisher: McGraw-Hill Education
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Question
Chapter 9, Problem 1MC
To determine
Concept introduction:
Variances are generally the deviations of actual reports with the budget made for the business. This is determined by comparing the actual one with the budgeted goals so as to know the deviation and then the managers can take the actions which are better for eliminating the variances.
The correct option.
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Which of the following is not a benefit of budgeting?
a.
It sets some standards to evaluate performance.
b.
It uncovers drawbacks of department performance
c. It reduces the need to track the actual cost activity
d. It formalizes a manager's planning efforts
Which of the following statements is false?
Standard costs (e.g., how much should be paid for each unit of input) are benchmarks for measuring performance.
Managers should investigate only unfavorable variances.
Variance analysis enhances responsibility accounting.
A variance is the difference between the budgeted amount and actual amount.
Discuss the factors that are likely to cause managers to submit budget estimates of sales and costs that do not represent their best estimate or expectations of what will actually occur.
Chapter 9 Solutions
Managerial Accounting
Ch. 9 - Briefly describe the difference between budgetary...Ch. 9 - What are standard costs? When are they set?Ch. 9 - Prob. 3QCh. 9 - Prob. 4QCh. 9 - Prob. 5QCh. 9 - Prob. 6QCh. 9 - Prob. 7QCh. 9 - Prob. 8QCh. 9 - Prob. 9QCh. 9 - How do the master budget, flexible budget, and...
Ch. 9 - Prob. 11QCh. 9 - What type of variance is calculated by comparing...Ch. 9 - Prob. 13QCh. 9 - Prob. 14QCh. 9 - Prob. 15QCh. 9 - Prob. 16QCh. 9 - Prob. 17QCh. 9 - Prob. 18QCh. 9 - What are the two variable overhead variances? What...Ch. 9 - Prob. 20QCh. 9 - Prob. 21QCh. 9 - Prob. 22QCh. 9 - Prob. 23QCh. 9 - Prob. 1MCCh. 9 - Prob. 2MCCh. 9 - Variances are always noted as favorable or...Ch. 9 - What type of budget is ail integrated set of...Ch. 9 - Prob. 5MCCh. 9 - Prob. 6MCCh. 9 - Prob. 7MCCh. 9 - Prob. 8MCCh. 9 - Prob. 9MCCh. 9 - Prob. 10MCCh. 9 - Prob. 1MECh. 9 - Creating Grading Scale Based on Ideal, Tight but...Ch. 9 - Prob. 3MECh. 9 - Prob. 4MECh. 9 - Calculating Unknown Values for Direct Labor...Ch. 9 - Prob. 6MECh. 9 - Prob. 7MECh. 9 - Prob. 8MECh. 9 - Prob. 9MECh. 9 - Prob. 10MECh. 9 - Prob. 11MECh. 9 - Prob. 12MECh. 9 - Preparing Journal Entries to Record Direct Labor...Ch. 9 - Prob. 1ECh. 9 - Prob. 2ECh. 9 - Interpreting Direct Materials Price, Quantity...Ch. 9 - Calculating Direct Materials and Direct Labor...Ch. 9 - Calculating Direct Materials and Direct Labor...Ch. 9 - Prob. 6ECh. 9 - Prob. 7ECh. 9 - Prob. 8ECh. 9 - Prob. 9ECh. 9 - Preparing Journal Entries to Record Direct...Ch. 9 - Prob. 11ECh. 9 - Calculating Fixed Manufacturing Overhead Spending,...Ch. 9 - Prob. 13ECh. 9 - Prob. 14ECh. 9 - Prob. 15ECh. 9 - Prob. 16ECh. 9 - Prob. 17ECh. 9 - Determining Actual, Standard Costs, and Variances...Ch. 9 - Prob. 1.1GAPCh. 9 - Prob. 1.2GAPCh. 9 - Prob. 1.3GAPCh. 9 - Prob. 2.1GAPCh. 9 - Prob. 2.2GAPCh. 9 - Prob. 2.3GAPCh. 9 - Prob. 3.1GAPCh. 9 - Prob. 3.2GAPCh. 9 - Prob. 3.3GAPCh. 9 - Prob. 4GAPCh. 9 - Prob. 5.1GAPCh. 9 - Prob. 5.2GAPCh. 9 - Prob. 5.3GAPCh. 9 - Prob. 6.1GAPCh. 9 - Prob. 6.2GAPCh. 9 - Prob. 6.3GAPCh. 9 - Prob. 7.1GAPCh. 9 - Prob. 7.2GAPCh. 9 - Prob. 7.3GAPCh. 9 - Preparing Journal Entries to Record Fixed...Ch. 9 - Prob. 9.1GAPCh. 9 - Prob. 9.2GAPCh. 9 - Prob. 10.1GAPCh. 9 - Prob. 10.2GAPCh. 9 - Prob. 1.1GBPCh. 9 - Prob. 1.2GBPCh. 9 - Prob. 1.3GBPCh. 9 - Prob. 2.1GBPCh. 9 - Prob. 2.2GBPCh. 9 - Prob. 2.3GBPCh. 9 - Prob. 3.1GBPCh. 9 - Prob. 3.2GBPCh. 9 - Prob. 3.3GBPCh. 9 - Prob. 4GBPCh. 9 - Prob. 5.1GBPCh. 9 - Prob. 5.2GBPCh. 9 - Prob. 5.3GBPCh. 9 - Prob. 6.1GBPCh. 9 - Prob. 6.2GBPCh. 9 - Prob. 6.3GBPCh. 9 - Prob. 7.1GBPCh. 9 - Prob. 7.2GBPCh. 9 - Prob. 7.3GBPCh. 9 - Prob. 8GBPCh. 9 - Prob. 9.1GBPCh. 9 - Prob. 9.2GBPCh. 9 - Calculating Variable Manufacturing Overhead, Fixed...Ch. 9 - Prob. 9.4GBPCh. 9 - Prob. 9.5GBPCh. 9 - Prob. 9.6GBPCh. 9 - Prob. 10.1GBPCh. 9 - Prob. 10.2GBP
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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
- Which of the following is not a part of budgeting? A. planning B. finding bottlenecks C. providing performance evaluations D. preventing net operating lossesarrow_forwardWhich 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.arrow_forwardDoes the volume variance convey any meaningful information to managers?arrow_forward
- The evaluation of performance of a certain business branch is of insignificant value to Select the correct response: Flexible budgets for mixed costs. The planning and control of future activities. The variances between budgeted and actual results. Static budget for mixed costs.arrow_forwardWhich of the following is not a benefit of participative budgeting? Multiple Choice It serves as training or development for managers. It provides information that employees know but managers do not. It reduces or eliminates the need for tracking actual cost activity. It enhances employee motivation and acceptance of goals.arrow_forwardExplain the different reasons why a manager might submit a biased budget estimate.arrow_forward
- Budget slack in the operating budgets a. will cause an organization to operate more efficiently b. is rarely found if the budgets are imposed c. results from unintentional managerial computational errors d. will cause an organization to operate more effectivelyarrow_forwardWhen would a static budget be effective in evaluating a manager performancearrow_forwardWhich of the following statements are TRUE? I. Responsibility accounting attempts to assign blame for problems to a specific manager.II. One benefit of a budget is that it helps managers gather relevant information for improving future performance.III. Challenging budgets tend to motivate improved performance.IV. Controllability may be difficult to pinpoint because some costs are the result of the market, not the manager.arrow_forward
- Which of the following is not a reason standard costs are separated into two components? a.Identifying variances determines which manager must find a solution to major discrepancies. b.If a negative variance is overshadowed by a favorable variance, managers may overlook potential corrections. c.The price and quantity variances need to be identified separately to correct the actual major differences. d.Variances bring attention to discrepancies in the budget and require managers to revise budgets closer to actual results.arrow_forwardwhat is the managers duty to take appropriate action when accounting reports indicate that expenditures are significantly above or below budget allocations. how do effective managers reduce cost?arrow_forwardComparing a static planning budget to actual costs is not a good way to assess whether variable costs are under control. True or False In a flexible budget, when the activity declines, the total variable cost also declines. True or False The main difference between a flexible budget and a static budget is that the static budget is not adjusted for changes in the level of activity. True or False To help assess how well a manager has controlled costs, actual costs should be compared to what the costs should have been for the actual level of activity. True or False Fixed costs should usually be included in performance reports because fixed costs are generally controllable. True or Falsearrow_forward
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