1.Allotherthingsthesame,whichofthefollowingwouldincreaseresidualincome?

A. Increaseinaverageoperatingassets
B. Increaseinminimumrequiredreturns
C. Decreaseinminimumrequiredreturn
D. Decreaseinnetoperatingincome
E. Noneoftheabove

2.Whichofthefollowingiscorrect?
I.
Aprofitcenterhascontroloverbothprofitandrevenue
II.
Aninvestmentcenterhascontroloverinvestedfunds,butnotovercosts/revenues
III.
Acostcenterhasnocontroloversales

A. OnlyI
B. OnlyII
C. OnlyIandIII
D. OnlyIandII
E. I,II,andIII

3.AdivisionofRhinoTechnologieshadanassetturnoverof0.5lastyear,andthisyear
theassetturnoverwas0.7.Basedsoleyonthisinformation,whichofthefollowing
statementsistrue?
A. Thedivisionsabilitytogeneratesalesimprovedthisyearascomparedtolastyear
B. Thedivision'sabilitytogeneratesalesdeclinedthisyearascomparedtolastyear
C. Thedivisiondidnotcontrolcostsaswellthisyearascomparedtolastyear
D. Noneoftheabove

4.ReedCompanysslaeslastyeartotaled$150,000anditsreturnonivenestment(ROI)
was12%.IFthecompanyturnoverwas3,thenitsnetoperatingincomefortheyear
musthavebeen:
A. $6,000
B. $2,000
C. $18,000
D. Itisimpossibletodeterminefromthedatagiven

5.ThemanagerialaccountantforABCCorporationcalculatedthefollowingforthe
WestDivisionofthecompany:residualincome$1,000andnetoperating:$80,000in
March.Theminimumrequiredrateofreturnforperformanceevaluationpurposesis
14%.Theresidualincomecalculatedindicates
A. TheWestDiv.earnedarateofreturnthatwasabove14%
B. TheWestDiv.earnedarateofreturnthatwasbelow14%
C. TheWestDiv.earnedareturnequalto14%
D. Moreinformationisneeded

6.Theperformancemeasuresonabalancescorecard
A. tendtofallintothreegroups:financialmeasures,internalbusinessprocessmeasures
andexternalbusinessprocessmeasures
B. tendtofallintofourgroups:financialmeasures,customermeasures,internalbusiness
processmeasuresandexternalbusinessprocessmeasures
C. Aredesignedtosupportanorganizationsstrategy
D. A&Caretrue
E. B&Caretrue

****USEFOR7AND8****
Hopeclinicusesclientvisitsasitsmeasureofactivity,DuringMay,theclinicbudgetedfor
2,1000clientvisits,butitsactuallevelofactivitywas2,050clientvisits.Theclinichas
providedthefollowingdataconcerningusedinitsbudgetingandisactualresultsforMay:
Datausedinbudgeting:
Fixedelementpermonth
Variableelementper
clientvisit
Revenue

$40

Personalexpenses
$23,200
$11.30
Medicalexpenses
$800
$7.90
Occupancyexpenses
$5,700
$1.10
Administrationexpenses
$3,300
$0.30
Totalexpenses
$33,000
$20.60

ActualresultsforMay:
Revenue
$82,960
Personalexpenses
$45,935
Medicalexpenses
$17,195
Administrationexpenses
$3,985
Totalexpenses
$74,990

7.ThespendingvarianceformedicalsuppliesinMaywouldbeclosestto:(notenot
lookingforexact)
A. $200Variable
B. $200Unfavorable
C. $195Favorable
D. $195Unfavorable

8.Thenetoperatingincomeshownonthestaticbudgetis:
A. $7,740
B. $6,770
C. $7,970
D. $9,220

9.Astaticbudget
A. Shouldbecomparedtoactualcosttoasseshowwellcostarecontrolled
B. Shouldbecomparedtoaflexiblebudgettoassesshowwellcostswerecontrolled
C. isvalidforonlyonelevelofactivity
D. Representsthebestwaytosetspendingtargetsformanagers

10.Alaborefficiencyvarianceresultingfromtheuseofpoorqualitymaterialsshould
bechargedtothe:
A. Theproductionmanager
B. Thepurchasingmanager
C. manufacturingoverhead
D. theindustrialengineeringdepartment

11.Acontinuous(orperpetualbudget):
A. ispreparedforarangeofactivitysothatthebudgetcanbeadjustedforchangesin
activity
B. isaplanthatisupdatedmonthlyorquarterly,droppingoneperiodandaddinganother
C. isastrategicplanthatdoesnotchange
D. Isusedincompaniesthatexperienceaninsignificantvarianceinsales

12.Whichofthefollowingrepresentsthecorrectorderinwhichtheindicatedbudget
documentsforamanufacturingcompanywouldbeprepared?
A. Salesbudget,cashbudget,DMbudget,DLbudget
B. Productionbudget,salesbudget,DMbudget,DLbudget
C. Salesbudget,cashbudget,productionbudget,DLbudget
D. S&Aexpensebudget,cashbudget,budgetedIS,budgetedBS

**Usefor13and14**
YoungEnterprisehasbudgetedsalesinunitsfornextfivemonths

July
4,600units
August
7,200units
September 5,400units
October
6,800units
November
3,800units

Pastexperiencehasshownthattheendinginventoryforeachmonthshouldequalto10%of
thenextmonthssalesinunits.TheinventoryonJune31fellshortofthisgoalsinceit
containedonly400units.Thecompanyneedstoprepareaproductionbudgetforthethird
quarter(Note:thethirdquarterincludesJuly,AugustandSeptember).

13.
ThetotalnumberofunitstobeproducedINAUGUSTis_____________units.

14.
Thedesiredendinginventoryforthequarteris___________units.

NOTE:thisisthehardestquestionIwillgiveyou(theoryandmath))Goodluck!

15.Towercompanyplannedtoproduce3,000unitsofitssingleproduct,Titactium,
duringNovember.ThestandardsforoneunitofTitactiumspecifysixpoundsof
materialat$0.30perpound.ActualproductioninNovemberwas3,100unitsof
Titactium.Therewasanunfavorablematerialpricevarianceof$380andafavorable
quantityvarianceof$120.Basedonthesevariances,onecouldconcludethat
A. morematerialswerepurchasedthanwereused
B. morematerialswereusedthanwerepurchased
C. IDK,toomanywords
D. theactualcostperpoundformaterialswerelessthanthestandardcostperpound
E. theactualusageofmaterialswaslessthanthestandardallowed

KEY:

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.

C
C
A
A
A
C
B
A
C
B
B
D
7020
680
E