Question 1

What are responsibility centers? What are the three levels of responsibility centers commonly found in organizations?

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Question 2

Who (what manager) in an organization is generally held responsible for volume variances?

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Question 3

How does the use of standard costs fit with the philosophy of management by exception?

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Question 4

For a product made by Parker Company, last year's standards for labor were 2 hours at $12 per hour. What should Parker take into account in setting the standards for this year?

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Question 5

What causes the sales price variance to be unfavorable?

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Question 6

What should be the organizational purpose for identifying and calculating variances?

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Question 7

How should the manager of a cost center be evaluated?

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Question 8

What is meant by "decentralization?"

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Question 9

How might return on investment be used in making resource allocation decisions within an organization?

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Question 10

Under what circumstances is a cost variance favorable?

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Question 11

What are cost centers? What responsibilities does the manager of a cost center have? And at what level on an organization chart are you most likely to find cost centers?

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Question 12

What are the responsibilities of the manager of an investment center? At what levels of an organization chart are investment centers most commonly found? What basis should be used for evaluating the manager of an investment center?

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Question 13

What is a variance?

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Question 14

What do marketing managers mean by the phrase, "making the numbers?"

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Question 15

How does a flexible budget differ from a company's master budget?

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Question 16

Distinguish between static and flexible budgets. Give an example of how flexible budgets might be used by a business.

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Question 17

Under what circumstances is a sales variance favorable?

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Question 18

Describe how a flexible budget is useful in planning for an organization.

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Question 19

What are profit centers? How should the manager of a profit center be evaluated?

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Question 20

How is the amount of a sales volume variance calculated?

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Quiz 15: Performance Evaluation