Question

True or False
14. A zero based budget shows the expected results for only one activity.......
16. flexible budgets are similar to zero based budgets which shows expected results of a business for each new year....
23. The principal of exceptions allows a company to focus on correcting differences between actual and standard performance.....
25. the standard setting process in an organization requires the effort of several departments....
26. one of the criticisms of using a standard cost system is that it discourages improvements........
28. A standard consist of two components; price and quantity.......
30 . All variance are controllable........
32. Direct labor variances are normally the responsibility of production supervisors for controlling direct labor cost......
34. A factory overhead cost variance report is a useful tool for management to use in controlling factory overhead costs......
36. in a decentralized organization, all major planning and operating decisions are made by top level management....
37. one of the advantages of a decentralized organization is that decisions made by managers may affect the profits of the company.......
44. Cost_ volume profits relationship can be used for analyzing the effects of sales mix on the break_ even point and profits......

Answer 1

14. False. Zero Based Budget shows the expected results for any number of activities, but not limited to only one activity.

16. False. Flexible Budgets are adjusted for each budget period from the master budget, whereas Zero based budget will be prepared afresh every budget period.

23. True. A company should correct the variances between standard & actual performance. And the same was provided by principal of exceptions.

25. False. Only Bottom up approach, the standard setting approach requires efforts of Several departments but in Top down approach the management themselves sets the standard without involving all the departments.

26. True. Standard Cost system only focuses on the differences by the organisation but not in improvements.

28. False. A standard also consist of yield, mix & other components too.