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Is the following statement true or false? “Standard costing (for control) involves: (i) The estimation of the costs of products or services; (ii) The collection of actual costs; (iii) The comparison of the actual costs with the predetermined estimates”

• True

• False

Which of the following is correct with regard to inventories? (i) Stock-outs arise when too little inventory is held (ii) Safety inventories are the level of units maintained in case there is unexpected demand (iii) A re-order level is where an order should be placed whenever inventory fall to this level.

• (i) and (ii) only

• (i) and (iii) only

• (ii) and (iii) only

• (i), (ii) and (iii)

Is the following statement true or false? “The sales volume variance is the difference between the actual units sold and the budgeted quantity, valued at the expected sales price per unit”

• True

• False

Which of the following sentences best describes what is necessary for a responsibility accounting system to be successful?

• Each manager should know the criteria used for evaluating his or her own performance.

• The details on the performance reports for individual managers should add up to the totals on the report of their superior.

• Each employee should receive a separate performance report.

• Service department costs should be apportioned to the operating departments that use the service.

Is the following statement about flexible budget preparation true or false? “Semi-variable costs need splitting into their fixed and variable elements for calculating budget cost allowance”.

• True

• False

Gross profit margin might be an appropriate measure for which of the following responsibility centres:

• All types of responsibility centres

• Only cost centre, profit centre and investment centre

• Only profit centre and investment centre

• Only profit centre

Which of the following is a style of performance evaluation identified in Hopwood's studies?

• Non-accounting

• Profit maximization

• Revenue focused

• Budget planning template

Which of the following best describes ‘zero-based budgeting’?

• A method of budgeting whereby all activities are re-evaluated each time a budget is formulated.

• The budget for each period is based on the current year's results, modified for changes in activity levels.

• The budget is updated in regular increments, by adding the budget for a further accounting period when the earliest accounting period has expired

• A budget method where an attempt is made to make expenditure under each cost heading as close to zero as possible.

Is the following statement about flexible budget true or false? “Flexible budget shows the costs and revenues at different levels of activity”

• True

• False

Is the following statement true or false? “In the periodic review system of inventory control, the inventory records are updated for each receipt and issue of inventory as it occurs.”

• True

• False