361 Chapter 8 MC Solutions.docx

1. A budget aids in
a.
communication.
b.
motivation.
c.
coordination.
d.
all of the above.
ANS: D PTS: 1 DIF: Easy OBJ: 8-1
NAT: AACSB: Reflective Thinking
2. Measuring the firm's performance against established objectives is part of which of the following functions?
a.
Planning
b.
Controlling
c.
Organizing
d.
Staffing
ANS: B PTS: 1 DIF: Easy OBJ: 8-1
NAT: AACSB: Reflective Thinking
3. The preparation of anization's budget
a.
forces management to look ahead and try to see the future of anization.
b.
requires that the entire management team work together to make and carry out the yearly plan.
c.
makes performance review possible at all levels of management.
d.
all of the above.
ANS: D PTS: 1 DIF: Easy OBJ: 8-1
NAT: AACSB: Reflective Thinking
4. Which of the following is a basic element of effective budgetary control?
a.
cost behavior patterns
b.
cost-volume-profit analysis
c.
standard costing
d.
all of the above
ANS: A PTS: 1 DIF: Easy OBJ: 8-1
NAT: AACSB: Reflective Thinking
5. When actual performance varies from the budgeted performance, managers will be more likely to revise future budgets if the variances were
a.
controllable rather than uncontrollable.
b.
uncontrollable rather than controllable.
c.
favorable rather than unfavorable.
d.
small.
ANS: B PTS: 1 DIF: Moderate OBJ: 8-1
NAT: AACSB: Reflective Thinking
6. External factors that cause the achievement pany goals are the
a.
annual budget.
b.
industry price and cost structure.
c.
talents possessed by its managers.
d.
board of directors.
ANS: B PTS: 1 DIF: Easy OBJ: 8-1
NAT: AACSB: Reflective Thinking
7. A budget is
a.
a planning tool.
b.
a control tool.
c.
a means municating goals to the firm's divisions.
d.
all of the above.
ANS: D PTS: 1 DIF: Easy OBJ: 8-1
NAT: AACSB: Reflective Thinking
8. Ineffective budgets and/or control systems are characterized by the use of
a.
budgets as a planning tool only and disregarding