11) Understanding the reasons for any difference between actual results and budgeted amounts is an important aspect of

A) extended value-chain analysis.

B) forecasting for the next accounting period.

C) kaizen management.

D) control.

E) management by perception.


12) Which of the following is a major benefit of utilizing a budgeting system?

A) It always results in more profitable decisions.

B) It is easier for managers than traditional decision-making models.

C) It saves costs by utilizing historical data to make projections.

D) It facilitates coordination and communication.

E) Once a successful budget is developed, it can be re-used year after year.

13) Once a plan is implemented, the control process

A) ensures that managers follow the pre-existing plan.

B) should allow the originating manager(s) to keep lower-level managers from making changes.

C) should be flexible.

D) should be followed rigidly.

E) requires top management permission to change.


14) A well-conceived plan allows managers to have the ability to

A) stay with the pre-existing plan when things start to change for the better.

B) leave the system and let the plan continue on its own.

C) underestimate the costs so that actual operating results will be favourable when comparisons are made.

D) take advantage of unforeseen opportunities.

E) stay the course regardless of the outcome.


15) The control function may include evaluating

A) the difference between current operating costs and last year’s operating costs.

B) the difference between budgeted amounts and actual results.

C) the difference between the original budget and the final adjusted budget.

D) the difference allowed in the current production costs.

E) the difference between the historical cost and the current cost.


16) Which of the following is not a use of feedback, from a manager’s perspective?

A) to improve past performances

B) to search for alternative ways of reaching goals

C) to change goals

D) to predict future events

E) to change the reward system

17) Which of the following is an example of an intrinsic reward?

A) participation in a stock option plan

B) receiving a cash performance bonus

C) being acknowledged for a job well done

D) receiving an all-expenses paid vacation as a bonus

E) receiving a salary increase to keep up with inflation


18) Place the five steps in the decision-making process in the correct order:

A = Obtain information

B = Decide on and implement one of the alternatives

C = Identify the problem and uncertainties

D = Implement the decision, evaluate performance, and learn

E = Make predictions about the future

A) D, B, E, A, C

B) E, D, A, B, C

C) C, A, E, B, D

D) A, E, B, D, C

E) A, C, B, D, E


19) Collecting information to follow through on how actual performance compares to planned or budgeted performance is referred to as

A) an accounting system.

B) scorekeeping.

C) management accounting.

D) attention directing.

E) problem solving.


20) Which of the following elements is contained within the Implement the Decision, Evaluate Performance, and Learn category in the Five-Step Decision-Making Process?

A) Identify the problem and uncertainties.

B) Obtain information.

C) Make predictions about the future.

D) Provide feedback.

E) Make decisions by choosing among alternatives.



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