Questions from Cost Management

Q: Some critics of budgeting believe that budgets are effective tools for planning

Some critics of budgeting believe that budgets are effective tools for planning but not for control purposes. What is the essence of this argument?

Q: Why is the sales budget considered the cornerstone of the organization’s master

Why is the sales budget considered the cornerstone of the organization’s master budget?

Q: In addition to the sales budget, what additional information does a

In addition to the sales budget, what additional information does a firm need to complete its materials purchases budget?

Q: List the major components of a cash budget.

List the major components of a cash budget.

Q: What is zero-base budgeting (ZBB)?

What is zero-base budgeting (ZBB)?

Q: Refer to Exhibit 12.4 in the text. What is

Refer to Exhibit 12.4 in the text. What is the depreciation expense deduction in each of 4 years for a $10,000 asset classified under MACRS as 3-year property? Exhibit 12.4:

Q: Define the term “budgetary slack.” Why is it common to

Define the term “budgetary slack.” Why is it common to find slack in budgets?

Q: What are relevant costs? Provide several examples for the decision to

What are relevant costs? Provide several examples for the decision to replace a piece of equipment.

Q: What is the relationship, if any, between the relevant cost

What is the relationship, if any, between the relevant cost analysis method and cost-volume-profit analysis (Chapter 09)?

Q: List at least four different decisions for which the relevant cost model

List at least four different decisions for which the relevant cost model can be used effectively.