D774 Intro to Business Accounting Exam with Questions and Answers

D774 Intro to Business Accounting Exam with Questions and Answers Which characteristic is an advantage of zero-based budgeting? ANSWER Gets rid of costs that have become obsolete over time Which characteristic is a major disadvantage of zero-based budgeting? ANSWER Expensive process Which characteristic of an expense is required in order to justify including the expense in this year's budget under zero-based budgeting? ANSWER It has a current and specific justification. What must happen before a detailed plan of correction can be developed after a large unfavorable variance has been computed? ANSWER The company must identify an individual with detailed knowledge of the cause of the variance. William is a summer accounting intern at a small manufacturing company. The company has only 15 full-time employees and has never employed a full-time accountant. William's summer project is to construct a list of important budget variances that the company's owner can use in managing the business. Which type of variance is one of the three basic kinds of budget variances that William should include on the list? ANSWER Revenue variance Which situation is an example of negative news uncovered by looking at trends in variances? Unfavorable cost variances are getting smaller.