Question 1

All of the above are correct.

Accepted Answer

A budget: A) is the quantitative expression of a proposed plan of action by management B) is an aid to coordinate what needs to be done C) generally includes both financial and nonfinancial aspects of the plan D) All of the above are correct.

Question 2

All of these answers are correct

Accepted Answer

Budgeting is used to help companies: A) plan to better satisfy customers B) anticipate potential problems C) focus on opportunities D) All of these answers are correct.

Question 3

is an aid to coordinating what needs to be done to implement a plan

Accepted Answer

A master budget: A) includes only financial aspects of a plan and excludes nonfinancial aspects B) is an aid to coordinating what needs to be done to implement a plan C) includes broad expectations and visionary results D) should not be altered after it has been agreed upon

Question 4

the use of scarce resources

Accepted Answer

Operating decisions primarily deal with: 2 A) the use of scarce resources B) how to obtain funds to acquire resources C) acquiring equipment and buildings D) satisfying stockholders

Question 5

how to obtain funds to acquire resources

Accepted Answer

Financing decisions primarily deal with: A) the use of scarce resources B) how to obtain funds to acquire resources C) acquiring equipment and buildings D) preparing financial statements for stockholders

Question 6

an ethical framework for decision making

Accepted Answer

Budgeting provides all of the following EXCEPT: A) a means to communicate the organization\'s short-term goals to its members B) support for the management functions of planning and coordination C) a means to anticipate problems D) an ethical framework for decision making

Question 7

planning again in light of feedback and current conditions

Accepted Answer

If initial budgets prove UNACCEPTABLE, planners achieve the most benefit from: A) planning again in light of feedback and current conditions B) deciding not to budget this year C) accepting an unbalanced budget D) using last year\'s budget

Question 8

combined form the master budget

Accepted Answer

Operating budgets and financial budgets: A) combined form the master budget B) are prepared before the master budget C) are prepared after the master budget D) have nothing to do with the master budget

Question 9

set specific expectations against which actual results can be compared

Accepted Answer

A good budgeting system forces managers to examine the business as they plan, so they can: A) detect inaccurate historical records B) set specific expectations against which actual results can be compared C) complete the budgeting task on time D) get promoted for doing a good job

Question 10

determine actual profitability

Accepted Answer

A budget can do all of the following EXCEPT: A) promote coordination among subunits B) determine actual profitability C) motivate managers D) motivate employees

Question 11

be prepared by managers from different functional areas working independently of each other

Accepted Answer

A budget should/can do all of the following EXCEPT: A) be prepared by managers from different functional areas working independently of each other B) be adjusted if new opportunities become available during the year C) help management allocate limited resources D) become the performance standard against which firms can compare the actual results

Question 12

past results can contain inefficiencies of the past year

Accepted Answer

A limitation of comparing a company\'s performance against actual results of last year is that: A) it includes adjustments for future conditions B) feedback is no longer a possibility C) past results can contain inefficiencies of the past year D) the budgeting time period is set at one year

Question 13

motivate improved performance

Accepted Answer

Challenging budgets tend to: A) decrease line-management participation in attaining corporate goals B) increase failure C) increase anxiety without motivation D) motivate improved performance

Question 14

past results may contain mistakes and substandard performance

Accepted Answer

Actual results should NOT be compared against past performance because: A) past results may contain mistakes and substandard performance B) past results will never happen again C) past performance is an indicator of future performance D) future conditions will be similar to past conditions

Question 15

adjustments for future conditions can be included

Accepted Answer

A company\'s actual performance should be compared against budgeted amounts for the same accounting period so that: A) adjustments for future conditions can be included B) no feedback is possible C) inefficiencies of the past year can be included D) a rolling budget can be implemented

Question 16

All of these answers are correct.

Accepted Answer

It is advantageous to coordinate budgets with: A) suppliers B) customers C) the marketing and production departments D) All of these answers are correct.

Question 17

All of these answers are correct.

Accepted Answer

A budget can help implement: A) strategic planning B) long-run planning C) short-run planning D) All of these answers are correct

Question 18

All of these answers are correct.

Accepted Answer

To gain the benefits of budgeting ________ must understand and support the budget. A) senior management B) middle management C) line employees D) All of these answers are correct.

Question 19

greater commitment

Accepted Answer

Participation of employees in the budgeting process helps to create: A) greater commitment B) greater anxiety C) less commitment D) better past performance

Question 20

spend little time on the budgeting process

Accepted Answer

Line managers who feel that top management does NOT believe in the budget are most likely to: A) pick up the slack and participate in the budgeting process B) be motivated by the budget C) spend little time on the budgeting process D) convert the budget to a shorter more reasonable time period

Question 21

guided by the purpose of the budget

Accepted Answer

The time coverage of a budget should be: A) one year B) guided by the purpose of the budget C) cover design through manufacture and sale of the product D) shorter rather than longer

Question 22

focus on the upcoming budget period

Accepted Answer

Rolling budgets help management to: A) better review the past calendar year B) deal with a 5-year time frame C) focus on the upcoming budget period D) rigidly administer the budget

Question 23

be flexible

Accepted Answer

Budgets should: A) be flexible B) be administered rigidly C) only be developed for short periods of time D) include only variable costs

Question 24

the budgeted balance sheet

Accepted Answer

Operating budgets include all of the following EXCEPT: A) the revenues budget B) the budgeted income statement C) the administrative costs budget D) the budgeted balance sheet

Question 25

budgeted income statement

Accepted Answer

Operating budgets include the: A) budgeted balance sheet B) budgeted income statement C) capital expenditures budget D) budgeted statement of cash flows

Question 26

budgeted income statement

Accepted Answer

The operating budget process generally concludes with the preparation of the: A) production budget B) distribution budget C) research and development budget D) budgeted income statement

Question 27

budgeted statement of cash flows

Accepted Answer

Which budget is NOT necessary to prepare the budgeted balance sheet? A) cash budget B) budgeted statement of cash flows C) budgeted income statement D) revenues budget

Question 28

budgeted income statement

Accepted Answer

Financial budgets include the all of the following EXCEPT: A) capital expenditures budget B) budgeted income statement C) budgeted balance sheet D) budgeted statement of cash flows

Question 29

The financial budget

Accepted Answer

________ includes a budgeted statement of cash flows and a budgeted balance sheet. A) An annual report B) The financial budget C) The operating budget D) The capital expenditures budget

Question 30

revenues budget, production budget, and direct manufacturing labor costs budget

Accepted Answer

The order to follow when preparing the operating budget is: A) revenues budget, production budget, and direct manufacturing labor costs budget B) costs of goods sold budget, production budget, and cash budget C) revenues budget, manufacturing overhead costs budget, and production budget D) cash expenditures budget, revenues budget, and production budget.

Question 31

DABC

Accepted Answer

In which order are the following developed? First to last: A = Production budget B = Direct materials costs budget C = Budgeted income statement D = Revenues budget A) ABDC B) DABC C) DCAB D) CABD

Question 32

the sales forecast

Accepted Answer

The budgeting process is most strongly influenced by: A) the capital budget B) the budgeted statement of cash flows C) the sales forecast D) the production budget

Question 33

The revenues budget

Accepted Answer

________ is the usual starting point for budgeting. A) The revenues budget B) Net income C) The production budget D) The cash budget

Question 34

input from sales managers and sales representatives

Accepted Answer

The sales forecast should be primarily based on: A) statistical analysis. B) input from sales managers and sales representatives C) production capacity D) input from the board of directors

Question 35

All of these answers are correct.

Accepted Answer

The sales forecast is influenced by: A) advertising and sales promotions B) competition C) general economic conditions D) All of these answers are correct.

Question 36

often the outcome of elaborate information gathering and discussions among sales managers

Accepted Answer

A sales forecast is: A) often the outcome of elaborate information gathering and discussions among sales managers B) developed primarily to prepare next year\'s marketing campaign C) solely based on sales of the previous year D) a summary of product costs that influence pricing decisio

Question 37

the expected level of sales for the company

Accepted Answer

The revenues budget identifies: A) expected cash flows for each product B) actual sales from last year for each product C) the expected level of sales for the company D) the variance of sales from actual for each product

Question 38

finished goods inventory levels

Accepted Answer

The number of units in the sales budget and the production budget may differ because of a change in: A) finished goods inventory levels B) overhead charges C) direct material inventory levels D) sales returns and allowances

Question 39

the revenues budget

Accepted Answer

Production is primarily based on: A) projected inventory levels B) the revenues budget C) the administrative costs budget D) the capital expenditures budget

Question 40

budgeted unit sales + targeted ending finished goods inventory - beginning finished goods inventory

Accepted Answer

Budgeted production equals: A) beginning finished goods inventory + budgeted unit sales - targeted ending finished goods inventory B) targeted ending finished goods inventory + beginning finished goods inventory - budgeted unit sales C) budgeted unit sales + targeted ending finished goods inventory - beginning finished goods inventory D) budgeted unit sales + targeted ending finished goods inventory + beginning finished goods inventory

Question 41

the units to be produced during a period

Accepted Answer

The direct materials usage budget is based on: A) the units to be produced during a period B) budgeted sales dollars C) the predetermined factory overhead rate D) the amount of labor-hours worked

Question 42

production needs plus target ending inventories less beginning inventories

Accepted Answer

Direct material purchases equal: A) production needs B) production needs plus target ending inventories C) production needs plus beginning inventories D) production needs plus target ending inventories less beginning inventories

Question 43

All of these answers are correct.

Accepted Answer

Individual budgeted amounts included in the manufacturing overhead costs budget are based on input from: A) operating personnel B) costs incurred in prior years C) cost changes expected in the future D) All of these answers are correct.

Question 44

All of these answers are correct.

Accepted Answer

The manufacturing overhead costs budget includes budgeted amounts for: A) indirect materials B) indirect manufacturing labor C) depreciation on factory equipment D) All of these answers are correct.

Question 45

direct labor and direct materials

Accepted Answer

Budgeted manufacturing overhead costs include all types of factory expenses EXCEPT: A) fixed items such as depreciation of manufacturing machinery B) variable items such as plant supplies C) indirect labor such as the salary of the plant supervisor D) direct labor and direct materials

Question 46

distribution cost budget

Accepted Answer

The cost of goods sold budget requires all of the following budgets EXCEPT: A) direct material cost budget B) manufacturing overhead cost budget C) distribution cost budget D) direct manufacturing labor cost budget

Question 47

$250,000

Accepted Answer

Grandma\'s Baskets Company expects to manufacture and sell 50,000 baskets in 2011 for $5 each. There are 4,000 baskets in beginning finished goods inventory with target ending inventory of 4,000 baskets. The company keeps no work-in-process inventory. What amount of sales revenue will be reported on the 2011 budgeted income statement? A) $246,000 B) $250,000 C) $254,000 D) $258,000

Question 48

40,200 units

Accepted Answer

Basile Corporation has budgeted sales of 36,000 units, target ending finished goods inventory of 6,000 units, and beginning finished goods inventory of 1,800 units. How many units should be produced next year? A) 43,800 units B) 40,200 units C) 31,800 units D) 36,000 units

Question 49

30,600 units

Accepted Answer

For next year, Manzo, Inc., has budgeted sales of 30,000 units, target ending finished goods inventory of 1,500 units, and beginning finished goods inventory of 900 units. All other inventories are zero. How many units should be produced next year? A) 29,400 units B) 30,000 units C) 30,600 units D) 32,400 units

Question 50

4,000 units

Accepted Answer

Wilcox Company has budgeted sales volume of 60,000 units and budgeted production of 54,000 units, while 10,000 units are in beginning finished goods inventory. How many units are targeted for ending finished goods inventory? A) 10,000 units B) 16,000 units C) 6,000 units D) 4,000 units

Question 51

$480,000

Accepted Answer

Kason, Inc., expects to sell 20,000 pool cues for $24.00 each. Direct materials costs are $4.00, direct manufacturing labor is $8.00, and manufacturing overhead is $1.60 per pool cue. The following inventory levels apply to 2011: Beginning inventory Ending inventory Direct materials 24,000 units 24,000 units Work-in-process inventory 0 units 0 units Finished goods inventory 2,000 units 2,500 units 28) On the 2012 budgeted income statement, what amount will be reported for sales? A) $492,000 B) $480,000 C) $624,000 D) $636,000

Question 52

20,500 cues

Accepted Answer

How many pool cues need to be produced in 2012? A) 22,500 cues B) 22,000 cues C) 20,500 cues D) 19,500 cues

Question 53

$272,000

Accepted Answer

On the 2012 budgeted income statement, what amount will be reported for cost of goods sold? A) $278,800 B) $272,000 C) $265,200 D) $306,000

Question 54

$82,000; $164,000; $32,800

Accepted Answer

What are the 2012 budgeted costs for direct materials, direct manufacturing labor, and manufacturing overhead, respectively? A) $0; $192,000; $38,400 B) $78,000; $156,000; $31,200 C) $160,000; $80,000; $32,000 D) $82,000; $164,000; $32,800

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