ACC 241 Exam 3 Question and
answers 100% correct 2025/2026
1. Forces managers to plan
2. Facilitates coordination and communication within the
business
3. Helps motivate personnel throughout organization to
meet planned objectives
4. Provides a standard for performance evaluation - correct answer ✔Benefits of Budgeting
Budgetary Slack - correct answer ✔the practice of managers knowingly
including a higher amount of expenditures or a lower amount of revenue in a budget.
Sales Budget > Production Budget > DM Budget > DL Budget > MOH Budget > Operating Expenses
Budget > Budgeted Income Statement - correct answer ✔Order of the Master Budget (Operating
Budgets)
1. Cost Center
2.) Revenue Center
3.) Profit Center
4.) Investment Center - correct answer ✔Four Types of Responsibility Centers
Cost Center - correct answer ✔a division that incurs costs but does not directly generate revenue.
Ex:
-production departments: packaging, distribution
-service/support departments: human resources, accounting departments
, Revenue Center - correct answer ✔a division that generates revenues
Ex: internet sales department
Profit Center - correct answer ✔a division that generates revenues and incurs costs.
-Managers are evaluated on profitability of divisions
-Profit center managers often supervise both cost and revenue center managers
Ex: Tempe Walmart, Deli department of Fry's
Investment Center - correct answer ✔a division that generates revenues, incurs costs, and controls the
investment of available funds.
-managers are evaluated on profitability of divisions and efficient use of assets.
Ex: subsidiary companies, Stand-alone divisions of a company
Return on Investment (ROI) - correct answer ✔measures the amount of income an investment center
earns relative to the size of its assets.
Operating Income / Total assets - correct answer ✔ROI Formula
Operating Income / Sales - correct answer ✔Sales Margin Formula
Sales / Total Assets - correct answer ✔Capital Turnover Formula
Residual Income (RI) - correct answer ✔the difference between operating income and the minimum
return required on a company's assets.
=Operating Income - Minimum Acceptable Income
answers 100% correct 2025/2026
1. Forces managers to plan
2. Facilitates coordination and communication within the
business
3. Helps motivate personnel throughout organization to
meet planned objectives
4. Provides a standard for performance evaluation - correct answer ✔Benefits of Budgeting
Budgetary Slack - correct answer ✔the practice of managers knowingly
including a higher amount of expenditures or a lower amount of revenue in a budget.
Sales Budget > Production Budget > DM Budget > DL Budget > MOH Budget > Operating Expenses
Budget > Budgeted Income Statement - correct answer ✔Order of the Master Budget (Operating
Budgets)
1. Cost Center
2.) Revenue Center
3.) Profit Center
4.) Investment Center - correct answer ✔Four Types of Responsibility Centers
Cost Center - correct answer ✔a division that incurs costs but does not directly generate revenue.
Ex:
-production departments: packaging, distribution
-service/support departments: human resources, accounting departments
, Revenue Center - correct answer ✔a division that generates revenues
Ex: internet sales department
Profit Center - correct answer ✔a division that generates revenues and incurs costs.
-Managers are evaluated on profitability of divisions
-Profit center managers often supervise both cost and revenue center managers
Ex: Tempe Walmart, Deli department of Fry's
Investment Center - correct answer ✔a division that generates revenues, incurs costs, and controls the
investment of available funds.
-managers are evaluated on profitability of divisions and efficient use of assets.
Ex: subsidiary companies, Stand-alone divisions of a company
Return on Investment (ROI) - correct answer ✔measures the amount of income an investment center
earns relative to the size of its assets.
Operating Income / Total assets - correct answer ✔ROI Formula
Operating Income / Sales - correct answer ✔Sales Margin Formula
Sales / Total Assets - correct answer ✔Capital Turnover Formula
Residual Income (RI) - correct answer ✔the difference between operating income and the minimum
return required on a company's assets.
=Operating Income - Minimum Acceptable Income
