ACG 2071 Chapter 9 Exam Questions with Correct Answers
Question 1:
A responsibility accounting performance report contains which of the following items? (Check
all that apply.)
Answer:
The difference between actual and budgeted amounts Actual amounts
A list of all controllable costs Budgeted amounts
Question 2:
Profit centers commonly use
Answer:
to report profit center performance: departmental income statements
Question 3:
A department that incurs costs without generating revenues is considered a(n):
Answer:
cost center
Question 4:
A retail store has 10,000 square feet of space and incurs rent costs of $5,000 per month. If
Department A uses 2,000 square feet of space, the amount of rent allocated to the department
will be $
Answer:
1000
Question 5:
An example of a cost that a department manager would not control is:
Answer:
the manager's own salary
Question 6:
Reports to
Answer:
managers are usually less detailed because they need to concentrate on the key issues.
upper-level
, Question 7:
how to allocate indirect expenses
Answer:
Decisions related to allocating expenses include: (Check all that apply).
Question 8:
how to allocate service department expenses
True or false: Controllable costs are the same as direct costs.
Answer:
False
Question 9:
A company incurs advertising costs of $10,000. The company's three selling departments have
the following sales: Department 1—$10,000; Department 2—$30,000; Department 3—$40,000.
Advertising is allocated based on percent of sales. The amount of advertising allocated to
Department 3 will be $
Answer:
5000
Question 10:
A cost that a manager can determine or influence is called a(n)
Answer:
controllable
Question 11:
List the steps in allocating costs to operating departments and preparing departmental income
statements, with the first step on top.
Answer:
1. Accumulate sales, direct expenses, indirect expenses by department Allocate indirect
expenses to service and operating departments Allocate service department expenses to
operating departments
Question 12:
A departmental contribution to overhead report is based on:
Answer:
controllable costs
Question 1:
A responsibility accounting performance report contains which of the following items? (Check
all that apply.)
Answer:
The difference between actual and budgeted amounts Actual amounts
A list of all controllable costs Budgeted amounts
Question 2:
Profit centers commonly use
Answer:
to report profit center performance: departmental income statements
Question 3:
A department that incurs costs without generating revenues is considered a(n):
Answer:
cost center
Question 4:
A retail store has 10,000 square feet of space and incurs rent costs of $5,000 per month. If
Department A uses 2,000 square feet of space, the amount of rent allocated to the department
will be $
Answer:
1000
Question 5:
An example of a cost that a department manager would not control is:
Answer:
the manager's own salary
Question 6:
Reports to
Answer:
managers are usually less detailed because they need to concentrate on the key issues.
upper-level
, Question 7:
how to allocate indirect expenses
Answer:
Decisions related to allocating expenses include: (Check all that apply).
Question 8:
how to allocate service department expenses
True or false: Controllable costs are the same as direct costs.
Answer:
False
Question 9:
A company incurs advertising costs of $10,000. The company's three selling departments have
the following sales: Department 1—$10,000; Department 2—$30,000; Department 3—$40,000.
Advertising is allocated based on percent of sales. The amount of advertising allocated to
Department 3 will be $
Answer:
5000
Question 10:
A cost that a manager can determine or influence is called a(n)
Answer:
controllable
Question 11:
List the steps in allocating costs to operating departments and preparing departmental income
statements, with the first step on top.
Answer:
1. Accumulate sales, direct expenses, indirect expenses by department Allocate indirect
expenses to service and operating departments Allocate service department expenses to
operating departments
Question 12:
A departmental contribution to overhead report is based on:
Answer:
controllable costs
