MULTIPLE CHOICE Which of the following is the main assumption that is made about managers in general in support of decentralization?Managers at the local/divisional level will act in the best interest of the organizationTop managers at corporate headquarters will act in the best interest of the organizationTop managers at corporate headquarters have access to better information for operational decisionsManagers at the local/divisional level have access to better information for operational decisions Kirkland Company has several service departments that provide services to each other as well as to operating departments within the company. Which method would be least accurate in allocating the company's service department costs?The sequential methodThe direct methodThe step-down methodThe reciprocal method Which of the following is an example of a committed fixed cost?A training program for salespersonsExecutive travel expensesProperty taxes on the factory buildingNew product research and development Which of the following variances is caused by a difference between the denominator activity in the predetermined overhead rate and the standard hours allowed for the actual production of the period?Variable overhead spending varianceVariable overhead efficiency varianceFixed overhead budget varianceFixed overhead volume variance

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Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter12: Balanced Scorecard And Other Performance Measures

Section: Chapter Questions

Problem 1EA: For the following situations, identify whether the description is probably a centralized or...

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MULTIPLE CHOICE

Which of the following is the main assumption that is made about managers in general in support of decentralization?

Managers at the local/divisional level will act in the best interest of the organization
Top managers at corporate headquarters will act in the best interest of the organization
Top managers at corporate headquarters have access to better information for operational decisions
Managers at the local/divisional level have access to better information for operational decisions

Kirkland Company has several service departments that provide services to each other as well as to operating departments within the company. Which method would be least accurate in allocating the company's service department costs?

The sequential method
The direct method
The step-down method
The reciprocal method

Which of the following is an example of a committed fixed cost?

A training program for salespersons
Executive travel expenses
Property taxes on the factory building
New product research and development

Which of the following variances is caused by a difference between the denominator activity in the predetermined overhead rate and the standard hours allowed for the actual production of the period?

Variable overhead spending variance
Variable overhead efficiency variance
Fixed overhead budget variance
Fixed overhead volume variance

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

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