When used for performance evaluation, periodic internal reports based on a respo

Question

When used for performance evaluation, periodic internal reports based on a responsibility accounting system should not:

A.   be related to the organization chart.
B.   include allocated common fixed costs.
C.   include variances between actual and budgeted controllable costs.
D.   distinguish between controllable and noncontrollable costs.
E.   None of these.
For the month of April, budgeted sales were $100,000 and budgeted cost of goods sold was $80,000. Actual sales were $80,000 and actual cost of goods sold amounted to $90,000. In preparing its monthly performance report:

A.   an unfavorable cost variance of $20,000.
B.   a favorable cost variance of $20,000.
C.   a favorable cost variance of $10,000.
D.   an unfavorable cost variance of $10,000.
E.   None of these. When used for performance evaluation, periodic internal reports based on a responsibility accounting system should not:

A.   be related to the organization chart.
B.   include allocated common fixed costs.
C.   include variances between actual and budgeted controllable costs.
D.   distinguish between controllable and noncontrollable costs.
E.   None of these.
For the month of April, budgeted sales were $100,000 and budgeted cost of goods sold was $80,000. Actual sales were $80,000 and actual cost of goods sold amounted to $90,000. In preparing its monthly performance report:

A.   an unfavorable cost variance of $20,000.
B.   a favorable cost variance of $20,000.
C.   a favorable cost variance of $10,000.
D.   an unfavorable cost variance of $10,000.
E.   None of these.

Explanation / Answer

B. should not include common fixed cost

C. an unfavourable cost variance of $ 10000

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