Bench Marking

1. (TCO 2) Benchmarking is (Points : 3)

relatively easy to do with the amount of available financial information about companies.

best done with the best in their field regardless of type of company.

simply reporting the magnitude of differences in costs or revenues across companies.

making comparisons to direct attention to why differences in costs exist across companies.

2. (TCO 2) To gain the benefits of budgeting, ________ must understand and support the budget. (Points : 3)

customers

management at all levels

suppliers

All of the above

3. (TCO 2) The operating budget process generally concludes with the preparation of the (Points : 3)

research and development budget.

budgeted income statement.

distribution budget.

production budget.

4. (TCO 2) Flexible budgets (Points : 3)

accommodate changes in the inflation rate.

accommodate changes in activity levels.

are used to evaluate capacity utilization.

are static budgets that have been revised for changes in prices.

5. (TCO 2) A favorable variance indicates that (Points : 3)

budgeted costs are less than actual costs.

actual revenues exceed budgeted revenues.

the actual amount decreased operating income relative to the budgeted amount.

All of the above

6. (TCO 2) Which of the following statements is true about overhead cost variance analysis using activity-based costing? (Points : 3)

Overhead cost variances are calculated for output-unit level costs only.

Overhead cost variances are calculated for variable manufacturing overhead costs only.

A four-variance analysis can be conducted.

Activity-based costing uses input measures for all activities, resulting in the inability to do flexible budgets needed for variance analysis.

7. (TCO 2) Fixed overhead costs include (Points : 3)

the cost of sales commissions.

property taxes paid on plant facilities.

indirect materials.

energy costs.

8. (TCO 2) Katie Enterprises reports the year-end information from...