ACCT 526 PRACTICE 2027 ANSWERS AND
QUESTIONS SET A+
✔✔relevant costing analysis that focuses on whether a product should be processed
beyond the split-off point. - ✔✔sell or process further decision
✔✔relevant costing analyses that focus on whether a specially priced order should be
accepted or rejected. - ✔✔special order decisions
✔✔the point at which products become distinguishable after passing through a common
process. - ✔✔split off point
✔✔a plan that plots a direction for an organization's future activities and operations; it
generally covers at least 5 years. The overall strategy is then translated into the long-
and short-term objectives that form the basis of the budget. - ✔✔strategic plan
✔✔costs for which the outlay has already been made and that cannot be affected by a
future decision. - ✔✔sunk cost
✔✔the difference between the sales price needed to achieve a projected market share
and the desired per-unit profit. - ✔✔target cost
✔✔a method of determining the cost of a product or service based on the price (target
price) that customers are willing to pay. - ✔✔target costing
✔✔the group that reviews the budget, provides policy guidelines and policy goals,
resolves differences that arise as the budget is prepared, approves the final budget, and
monitors the actual performance of the organization as the year unfolds. - ✔✔budget
committee
✔✔typically the controller, this is the person responsible for directing and coordinating
the organization's overall budgeting process. - ✔✔budget director
, ✔✔padding the budget, occurs when a manager deliberately underestimates revenues
or overestimates costs in order to make budgeted expectations more easily achievable
in the future. - ✔✔budgetary slack
✔✔a budget that shows budgeted cash inflows and outflows for the time period so that
managers can determine any expected cash excess or deficiency. - ✔✔cash budget
✔✔costs whose level a manager can influence or control. - ✔✔controllable costs
✔✔a budget that shows the expected production cost of the units budgeted to be sold
during the period. - ✔✔COGS budget
✔✔the budget showing the expected number of direct labor hours to be worked and the
total cost of direct labor for the budget period. - ✔✔direct labor budget
✔✔a budget that shows the amount and cost of every type of raw material to be
purchased in each time period. - ✔✔direct materials purchases budget
✔✔individual behavior that is in basic conflict with the goals of the organization. -
✔✔dysfunctional behavior
✔✔budget that shows the cost of units budgeted to be in ending finished good
inventory. - ✔✔ending finished goods inventory budget
✔✔budgets that detail the inflows and outflows of cash and the overall financial position
of the firm. - ✔✔financial budgets
✔✔budget that shows expected costs for a particular activity level. A before-the-fact
flexible budget gives expected costs for a range of activity levels. An after-the-fact
flexible budget gives expected costs for the actual level of activity. - ✔✔flexible
(variable) budgets
✔✔the difference between the budgeted costs and actual costs for the chosen level of
activity. - ✔✔flexible budget variance
✔✔the alignment of managerial and organizational goals. - ✔✔goal congruence
✔✔monetary rewards used to control a manager's tendency to shirk and waste
resources by tying budgetary performance to salary increases, bonuses, and
promotions. - ✔✔monetary incentives
QUESTIONS SET A+
✔✔relevant costing analysis that focuses on whether a product should be processed
beyond the split-off point. - ✔✔sell or process further decision
✔✔relevant costing analyses that focus on whether a specially priced order should be
accepted or rejected. - ✔✔special order decisions
✔✔the point at which products become distinguishable after passing through a common
process. - ✔✔split off point
✔✔a plan that plots a direction for an organization's future activities and operations; it
generally covers at least 5 years. The overall strategy is then translated into the long-
and short-term objectives that form the basis of the budget. - ✔✔strategic plan
✔✔costs for which the outlay has already been made and that cannot be affected by a
future decision. - ✔✔sunk cost
✔✔the difference between the sales price needed to achieve a projected market share
and the desired per-unit profit. - ✔✔target cost
✔✔a method of determining the cost of a product or service based on the price (target
price) that customers are willing to pay. - ✔✔target costing
✔✔the group that reviews the budget, provides policy guidelines and policy goals,
resolves differences that arise as the budget is prepared, approves the final budget, and
monitors the actual performance of the organization as the year unfolds. - ✔✔budget
committee
✔✔typically the controller, this is the person responsible for directing and coordinating
the organization's overall budgeting process. - ✔✔budget director
, ✔✔padding the budget, occurs when a manager deliberately underestimates revenues
or overestimates costs in order to make budgeted expectations more easily achievable
in the future. - ✔✔budgetary slack
✔✔a budget that shows budgeted cash inflows and outflows for the time period so that
managers can determine any expected cash excess or deficiency. - ✔✔cash budget
✔✔costs whose level a manager can influence or control. - ✔✔controllable costs
✔✔a budget that shows the expected production cost of the units budgeted to be sold
during the period. - ✔✔COGS budget
✔✔the budget showing the expected number of direct labor hours to be worked and the
total cost of direct labor for the budget period. - ✔✔direct labor budget
✔✔a budget that shows the amount and cost of every type of raw material to be
purchased in each time period. - ✔✔direct materials purchases budget
✔✔individual behavior that is in basic conflict with the goals of the organization. -
✔✔dysfunctional behavior
✔✔budget that shows the cost of units budgeted to be in ending finished good
inventory. - ✔✔ending finished goods inventory budget
✔✔budgets that detail the inflows and outflows of cash and the overall financial position
of the firm. - ✔✔financial budgets
✔✔budget that shows expected costs for a particular activity level. A before-the-fact
flexible budget gives expected costs for a range of activity levels. An after-the-fact
flexible budget gives expected costs for the actual level of activity. - ✔✔flexible
(variable) budgets
✔✔the difference between the budgeted costs and actual costs for the chosen level of
activity. - ✔✔flexible budget variance
✔✔the alignment of managerial and organizational goals. - ✔✔goal congruence
✔✔monetary rewards used to control a manager's tendency to shirk and waste
resources by tying budgetary performance to salary increases, bonuses, and
promotions. - ✔✔monetary incentives
