Questions from Management Accounting

Q: What is a benchmark? Give an example of three types of

What is a benchmark? Give an example of three types of benchmark of interest to managers.

Q: What is the key question in deciding which variances should be calculated

What is the key question in deciding which variances should be calculated and analyzed?

Q: ‘Performance may be both effective and efficient, but either condition

‘Performance may be both effective and efficient, but either condition can occur without the other.’ Do you agree? Give an example of effectiveness. Give an example of efficiency

Q: ‘There are many costs associated with acquiring and using materials over

‘There are many costs associated with acquiring and using materials over and above materials purchase costs.’ Give three examples.

Q: How might the continuous improvement theme be incorporated into the process of

How might the continuous improvement theme be incorporated into the process of setting budgeted costs?

Q: What are the steps in planning variable-overhead costs?

What are the steps in planning variable-overhead costs?

Q: Budgeting for variable manufacturing overhead requires a knowledge of cost drivers.

Budgeting for variable manufacturing overhead requires a knowledge of cost drivers. Name three possible cost drivers.

Q: Both financial and non-financial measures are used to control variable

Both financial and non-financial measures are used to control variable manufacturing overhead. Give two examples of each type of measure.

Q: Assume variable manufacturing overhead is allocated using machine-hours. Give

Assume variable manufacturing overhead is allocated using machine-hours. Give three possible reasons for a €25 000favourable variable-overhead efficiency variance.

Q: Explain how 4-variance analysis differs from 1-, 2-

Explain how 4-variance analysis differs from 1-, 2- and 3-variance analyses.