MA T/F

Flexing the budget means adjusting the budget to take into account the actual prices incurred

FALSE

In batch costing, 100 units at 50% complete = 50 equivalent units

TRUE

Non-financial items are not important in decision-making

FALSE

We identify activity cost drivers in activity-based costing

TRUE

The commonest limiting factor for the budgeting process is production

FALSE

Discount rate for discounting cash flows = company’s weighted average cost of capital

TRUE

Differences in accounting in different countries may be due to history or technology

TRUE

The discount rate to discount cash flows is the interest charged by the Central Bank

FALSE

Payback period generally does not use discounted cash flows it is however possible to incorporate them into payback models

TRUE

Balances scorecard uses both financial and non-financial indicators

TRUE

In absorption costing, it's important to identify activity cost drivers

FALSE

The strategic choice may involve exploiting inherent strengths such as the business's products or customer base and/or external diversification through acquisition, merger or collaboration.

TRUE

When recovering costs for pricing we use total absorption costing. However, for stock validation, we use absorption costing or marginal costing.

FALSE

The break-even point is variable costs divided by contribution per unit.

FALSE

Strategic management accounting is concerned principally with short-term operational decisions

FALSE

The two main branches of cost accounting are costing and planning, control and performance

TRUE

A cost is an actual past expenditure

FALSE

The accounting rate of return is the only investment appraisal technique that focuses on products not cash flows

TRUE

The balanced scorecard uses only financial information.

FALSE

A master budget is formed by feeding in the results from all the other budgets.

TRUE

Contribution is sales less variable costs.

TRUE

Fixed costs are those that do not vary long-term changes in the level of sales or production.

FALSE

Total absorption costing is where all the overheads incurred by a company are recovered in the valuation of stock.

TRUE

The two main branches of management accounting are cost accounting and decision-making.

TRUE

The four main capital investment appraisal techniques are payback period, accounting rate of return, net present value and internal rate of return.

TRUE

The cost of activities in value chain analysis is determined by key cost drivers.

TRUE

SWOT analysis stands for strengths, weaknesses, opportunities and threats.

TRUE

Discounted cash flow discounts the future expected cash flows of a project back to their present-day monetary values.

TRUE

Shareholders, analyst advisers and Customers are examples of internal and external users of accountant.

FALSE

The four main aspects of budget and planning, coordinating, control and motivation.

TRUE

The direct materials price variance is: (the standard price per unit of material minus the actual price per unit of material) multiplied by the actual quantity of materials used.

TRUE

In stock valuation, marginal costing is normally used in valuing stock in financial reporting.

FALSE

Net present value and the internal rate of return use discounted cash flows.

TRUE

The product portfolio matrix consists of dogs, question mark, stars and cash balls.

FALSE

Spending to budget, padding the budget and creative budgeting are all common behavioral responses to budgeting.

TRUE

The contribution/sales ratio is profit divided by sales.

FALSE

Benchmarking measures a business against its competitors.

TRUE

Accountants perform other roles such as e.g. auditing, accounting, and management accounting.

TRUE

Flexing the budget means adjusting the budget to take into account the actual quantity produced.

TRUE

Strategic management accounting looks at both the internal and external environments of a business.

TRUE

The EVA measure informs whether a company creates value for shareholders

TRUE

The balanced scorecard uses a mixture of non-financial performance indicators

TRUE

The balanced scorecard uses a mixture of non-financial performance indicators

TRUE

A manufacturing business may prepare a raw materials, a production cost and a finished goods budget.

TRUE

Payback period generally does not use discounted cash flows, it is however possible to incorporate them into payback models

TRUE

The accounting rate of return is the only investment appraisal technique that focuses on profits not cash flows

TRUE

The break-even analysis shows a point at which a product makes a profit

FALSE

Contribution and contribution per unit are useful when making short-term business decisions

TRUE

Fixed costs are those that do not vary with long-term changes in the level of sales or production

FALSE

Flexing the budget means adjusting the budget to take into account actual quantity produced.

TRUE

Spending to budget, padding the budget and creative budgeting are all common behavioral responses to budgeting.

TRUE