44. Which of the following is not relevant to management\'s decision regarding r

Question

44. Which of the following is not relevant to management's decision regarding refinishing the tables or selling them as is? a. The additional revenue that can be generated. eady b. The $355,000 manufacturing costs of the tables already incurred. c. The additional $315,000 cost to refinish the tables. d. All information is considered relevant to the decision at hand. of the tables already incurred. 45. Using the following table to perform an incremental analysis, what decision should management make? Incremental Analysis Sell "As is" Rework a. Sell "As is." b. Rework. c. Neither d. Not enough information to make a decision. 46. The benefits of budgeting include all of the following except: Enabling the company to produce more for less cost. Assigning responsibility for situations that require corrective action. Coordinating activities between departments within an organization. Creating standards for evaluating performance. a. b. c. d. 47. The most widely used budgeting approach is the: a. Operational approach. b. Behavioral approach. c. Strategic approach. d. Tactical approach. 48. Which approach involves setting budgeted amounts that assume complete elimination of inefficiencies and a level of absolute efficiency? a. The behavioral approach. b. The total quality management approach. c. The strategic approach. d. The master budget approach. 49. A master budget usually includes all of the following except: a. A sales forecast. b. A cash budget. c. A projected tax return. d. Financial statements.

Explanation / Answer

44) The $355000 manufacturing costs already incurred - is not relevant for management's decsion making.

Relevant costs are those costs that will make a difference in a decision. Relevant costs are future costs that will differ among alternatives. The costs that already incurred is regarded as sunk costs which has no relevance for the decision to be made in future for further processing.

45)

Not enough information to make the decision.

The decision whether to "sell as is" or "rework" could only be made if the incremental revenue or costs analysis are given in the table. That means the decision could only be made if we know from the table which one of the two options will leave the company in a financially better position.

46)

Enabling company to produce more at less cost

Budgeting is a quantitative expression of the future course of action of the company in monetary terms. It includes a quantitative plan, based on the normal working condition, setting a quantitative standard for all possible aspects of the operations of a company. The budget is set by coordinating the departments of an organisation, setting financial standards that could be and should be achieved by the company as well as to provide a basis for initiating the corrective actions if the performance of the company does not conform to the budget.

47)

Operational Approach

A business's forecasted revenues along with forecasted expenses, usually for a period of one year or less.

48)

The total quality Management approach

As the name suggests, the budget focuses on the total quality management of operations and provides a plan exclusive of any inefficiencies in operations and including the most efficient performance to achieve hundred percent qualities in its operations so as to produce the best quality result only.

48)

Projected tax return

Master budget includes financial statements like income statement and balance sheet based on the forecasted sales, cash budget as well as budget for other expenses.

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