Question Details

Accounting 101 PART 7 BUDGETARY CONTROL AND
RESPONSIBILITY ACCOUNTING

COMPLETION STATEMENTS
	128.	A major aspect of budgeting control is the use of budget reports that compare _____________________ with _______________________.
	129.	In analyzing differences from planned objectives, management may take ___________________, or it could decide to modify ___________________.
	130.	The master budget is a __________________ budget which is based on operating at one budgeted activity level.
	131.	A __________________ budget projects budget data for various levels of activity.
	132.	Total ________________ costs will be the same on the master budget and on a flexible budget which reflects the actual level of activity.
	133.	Under ___________________ accounting, the evaluation of a manager's performance is based on the costs and revenues directly under that manager's control.
	134.	A cost is __________________ at a given level of managerial responsibility if a manager has the authority to incur the cost in a given time period.
	135.	In general, costs ____________________ directly by the level of responsibility are _______________, whereas costs that are ____________________ to the responsibility level are __________________.
	136.	Responsibility centers may be classified into three types: (1)____________________, (2)___________________ and, (3)____________________.
	137.	The primary basis for evaluating the performance of a manager of an investment center is _________________.
	138.	Return on investment is calculated by dividing _________________________ by ________________________.




MATCHING
139.	Match the items below by entering the appropriate code letter in the space provided.

	A.	Budgetary control	G.	Responsibility reporting system
	B.	Static budget	H.	Return on Investment
	C.	Flexible budget	I.	Profit center
	D.	Responsibility accounting	J.	Investment center
	E.	Controllable costs	K.	Indirect fixed costs
	F.	Management by exception	L.	Direct fixed costs

____	1.	The review of budget reports by top management directed entirely or primarily to differences between actual results and planned objectives.

____	2.	A part of management accounting that involves accumulating and reporting revenues and costs on the basis of the individual manager who has the authority to make the day-to-day decisions about the items.

____	3.	The preparation of reports for each level of responsibility shown in the company's organization chart.

____	4.	A projection of budget data at one level of activity.

____	5.	Costs that a manager has the authority to incur within a given period of time.

____	6.	The use of budgets to control operations.

____	7.	A projection of budget data for various levels of activity.

____	8.	A responsibility center that incurs costs, generates revenues, and has control over the investment funds available for use.

____	9.	Costs that relate specifically to a responsibility center and are incurred for the sole benefit of the center.

____	10.	A responsibility center that incurs costs and also generates revenues.

____	11.	Costs which are incurred for the benefit of more than one profit center.

____	12.	A measure of the profitability of an investment center computed by dividing controllable margin (in dollars) by average operating assets.