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ces are often isolated at the time materials are purchased, rather than when they are to facilitate earlier recognition of variances Material price d e production, to facilitate 14. The materia al price variance is computed based on the amount of materials purchased during the period. that can be avoided by choosing one alternative over another is relevant for decision purposes Sun Costs are never relevant in decision makine 17 future costs that do not differ between the alternatives in a decision are avoidable costs 18. It may be a good decision to replace an asset before its original cost has been fully recovered through increased revenues of decreased costs. 19. The payback method analyzes cash flows; however, it does not consider the time value of money. 20. The present value of an amount to be received in five years is exactly twice as large as the present value of an equal amount to be received in ten years. 21. Which of the following is not a benefit of budgeting? a. The budgeting process enables managers to uncover bottlenecks as they occur b. Budgets communicate management's plans throughout the organization c. Budgets define goals and objectives that can serve as benchmarks for evaluating subsequent performance 22. The system of accountability in which managers are held responsible for those items of revenue and costs and only those items-over which they can exert significant control is referred to as a. Budgeting b. Control c. Responsibility Accounting d. Self-Imposed Accounting 23. Which of the following explain why operating budgets generally span a period of one year? a Accounting regulations mandate that all operating budgets be prepared for one year D. Operating budgets, by definition, are prepared for one-year periods companies choose a span of one vear to correspond to their fiscal years d. Operating budgets need to correspond with the calendar year. Answer True or False for questions 1-20

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