Running Head: MBA 503 Managerial Accounting
MBA 503: Managerial Accounting
Assignment 5.1: Problem, Chapter 8 & 9
Jones International University
Chapter 8: 1, 9, 15, 18
Q1: What is the difference between a static budget and flexible budget? When is each used?
Q9: Minnie Divers, the manager of the marketing department for one of the industry’s leading retail businesses, has been notified by the accounting department that her department experienced an unfavourable sales volume variance in the preceding period but a favourable sales price variance. Based on these contradictory results, how would you interpret her overall performance as suggested by her variances? Q15: Sara Anderson says that she is a busy woman with no time to look at favorable variances. Instead, she concentrates solely on the favorable once. She says that favorable variances imply that employees are doing better than expected and need only quick congratulations. In contrast, unfavourable variances indicate that change is needed to get the substandard performance up to par. Do you agree? Explain. Q18: John Jamail says that he doesn’t understandwhy companies have labor price variances because most union contractsor other binding agreements set wage rates that do not normally change in the short term. How could rate variances occur even when binding commitments hold the dollar per hour rate constant?
Chapter 9: 1, 4, 6, 13
Q1: Pam Kelly says she has no faith in budgets, Her company, Kelly Manufacturing Corporation, spent thousands of dollars to install a sophisticated budget system. One year later the company’s expenses are still out of control. She believes budgets simply do not work. How would you respond to ms. Kelly’s beliefs?
Q4: Who receives responsibility reports? What do the reports include? Q6: How do responsibility reports promote the...
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