Achievement Test 5: Chapters 9-10 Name ___________________________ Managerial Accounting, 6e Instructor ________________________ Section # _________ Date __________ Part I II III IV Total Points 26 32 22 20 100 Score PART I — MULTIPLE CHOICE (26 points) Instructions: Designate the best answer for each of the following questions. ____ 1. Office Stuff produced 15,000 file cabinets at a cost of $80,000. Production for the period was estimated at 14,000 file cabinets at a cost of $75,000. On which of the following should the flexible budget be based? a. Budgeted costs of actual production b. Budgeted costs of budgeted production c. Actual costs of budgeted production d. Actual costs of actual production ____ 2. Which of the following is true with regard to budgeting vs. long-range planning? a. Both tend to be very detailed. b. They are the same in all significant aspects. c. The maximum length for both usually is a year, with shorter periods of time also common. d. Budgeting is oriented more toward short-term goals; long-range planning toward long-term goals. ____ 3. Which of the following is false with regard to budgetary planning? a. The starting point for the budgets of a not-for-profit organization is generally receipts, rather than expenditures. b. A merchandising company uses a purchases budget instead of a production budget. c. Budgets may be used by manufacturing companies, merchandising companies, service enterprises, and not-for-profit organizations. d. For a service enterprise, the critical factor in budgeting is coordinating professional staff needs with anticipated services. ____ 4. The manager of an investment center can improve ROI by a. reducing variable and/or controllable fixed costs. b. reducing average operating assets. c. increasing sales. d. all of the above.