Answer the following statements true (T) or false (F)
1. When using management by exception, managers investigate only those variances that are unfavorable.
2. A favorable variance has a debit balance and is a contra revenue.
3. An unfavorable variance means more cost has been incurred than planned.
4. Favorable variances are contra expenses and therefore decrease Cost of Goods Sold.
5. When a manufacturing company uses a standard cost system, the direct materials cost variance is recorded at the time direct materials are issued in production.
1. FALSE
2. FALSE
3. TRUE
4. TRUE
5. FALSE
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All business corporations derive their existence from the:
A. common law. B. state in which they are incorporated. C. federal government. D. Commerce Clause of the U.S. Constitution.
The most significant signs of a well-managed company are
A. a visionary mission statement and a willingness to pursue offensive strategies rather than defensive strategies. B. a profitable business model and a balanced scorecard approach to measuring the company's performance. C. aggressive pursuit of new opportunities and a willingness to change the company's business model whenever circumstances warrant. D. the eagerness with which executives set stretch financial and strategic objectives and develop an ambitious strategic vision. E. good strategy-making combined with good strategy execution.
Firms that follow the constant payout ratio dividend policy have:
A. stable dividend payments, even when earnings fluctuate. B. fluctuating dividend payments, even when earnings are stable. C. higher costs of equity when earnings are stable than similar firms that have fluctuating earnings. D. lower costs of retained earnings when earnings are volatile than similar firms that have stable earnings. E. fluctuating dividend payments when earnings fluctuate.
The common law of torts protects employees from all of the following except:
A) an unreasonable intrusion into their private lives by employers. B) unreasonable disclosure by employers of private information. C) unreasonable publicity putting them in a false light. D) monitoring of employer-provided e-mail systems.