Question 1

Long-range planning usually encompasses a period of at least

Accepted Answer

A) six months. 
B) 1 year. 
C) 5 years. 
D) 10 years. 
A) six months. 
B) 1 year. 
C) 5 years. 
D) 10 years.

Question 2

A benefit of budgeting is that it provides definite objectives for evaluating performance.

Accepted Answer

A) True 
 B)False

Question 3

On January 1, Kale Company has a beginning cash balance of $42,000. During the year, the company expects cash disbursements of $340,000 and cash receipts of $290,000. If Kale requires an ending cash balance of $40,000, the company must borrow

Accepted Answer

A) $32,000. 
B) $40,000. 
C) $48,000. 
D) $92,000. 
A) $32,000. 
B) $40,000. 
C) $48,000. 
D) $92,000.

Question 4

A budget can be a means of communicating a company's objectives to external parties.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following expenses would not appear on a selling and administrative expense budget?

Accepted Answer

A) Sales commissions 
B) Depreciation 
C) Property taxes 
D) Indirect labor 
A) Sales commissions 
B) Depreciation 
C) Property taxes 
D) Indirect labor

Question 6

Which of the following items does not follow from the adoption of a budget?

Accepted Answer

A) Promote efficiency 
B) Deterrent to waste 
C) Basis for performance evaluation 
D) Guarantee of accomplishing the profit objective 
A) Promote efficiency 
B) Deterrent to waste 
C) Basis for performance evaluation 
D) Guarantee of accomplishing the profit objective

Question 7

Off-Line Co. has 9,000 units in beginning finished goods. The sales budget shows expected sales to be 36,000 units. If the production budget shows that 42,000 units are required for production, what was the desired ending finished goods?

Accepted Answer

A) 3,000. 
B) 9,000. 
C) 15,000. 
D) 27,000. 
A) 3,000. 
B) 9,000. 
C) 15,000. 
D) 27,000.

Question 8

The formula for determining budgeted merchandise purchases is budgeted

Accepted Answer

A) production + desired ending inventory - beginning inventory. 
B) sales + beginning inventory - desired ending inventory. 
C) cost of goods sold + desired ending inventory - beginning inventory. 
D) cost of goods sold + beginning inventory - desired ending inventory. 
A) production + desired ending inventory - beginning inventory. 
B) sales + beginning inventory - desired ending inventory. 
C) cost of goods sold + desired ending inventory - beginning inventory. 
D) cost of goods sold + beginning inventory - desired ending inventory.

Question 9

Correy Company reported the following information for 2016:
$$\begin{array} { l c c c } 
& \text { October }& \text { November } &  \text { December } \
\text { Budgeted sales } & \$ 460,000 &  \$ 440,000 & \$ 540,000 \
\text { Budgeted purchases } & \$ 240,000 & \$ 256,000 & \$ 288,000
\end{array}$$
Cost of goods sold is 35% of sales.
-Correy purchases and pays for merchandise 60% in the month of acquisition and 40% in the following month.
-Accounts payable is used only for inventory acquisitions.
How much is the budgeted balance for Accounts Payable at October 31, 2016?

Accepted Answer

A) $96,000 
B) $144,000 
C) $204,000 
D) $102,400 
A) $96,000 
B) $144,000 
C) $204,000 
D) $102,400

Question 10

Of the following items, which one is not obtained from an individual operating budget?

Accepted Answer

A) Selling and administrative expenses 
B) Accounts receivable 
C) Cost of goods sold 
D) Sales 
A) Selling and administrative expenses 
B) Accounts receivable 
C) Cost of goods sold 
D) Sales

Question 11

Comma Co. makes and sells widgets. The company is in the process of preparing its selling and administrative expense budget for the month. The following budget data are available:   Expenses are paid in the month incurred. If the company has budgeted to sell 80,000 widgets in October, how much is the total budgeted selling and administrative expenses for October?

Accepted Answer

A) $940,000 
B) $140,000 
C) $930,000 
D) $800,000 
A) $940,000 
B) $140,000 
C) $930,000 
D) $800,000

Question 12

Burr, Inc.'s direct materials budget shows total cost of direct materials purchases for April $400,000, May $480,000 and June $560,000. Cash payments are 60% in the month of purchase and 40% in the following month. The budgeted cash payments for June are

Accepted Answer

A) $528,000. 
B) $512,000. 
C) $480,000. 
D) $416,000. 
A) $528,000. 
B) $512,000. 
C) $480,000. 
D) $416,000.

Question 13

On January 1, Witt Company has a beginning cash balance of $126,000. During the year, the company expects cash disbursements of $1,020,000 and cash receipts of $870,000. If Witt requires an ending cash balance of $120,000, Witt Company must borrow

Accepted Answer

A) $96,000. 
B) $120,000. 
C) $144,000. 
D) $276,000. 
A) $96,000. 
B) $120,000. 
C) $144,000. 
D) $276,000.

Question 14

Teller Co. is planning to sell 900 boxes of ceramic tile, with production estimated at 870 boxes during May. Each box of tile requires 44 pounds of clay mix and a quarter hour of direct labor. Clay mix costs $0.40 per pound and employees of the company are paid $12.00 per hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Teller has 3,900 pounds of clay mix in beginning inventory and wants to have 4,500 pounds in ending inventory.
What is the total amount to be budgeted for direct labor for the month?

Accepted Answer

A) $2,610 
B) $10,440 
C) $2,700 
D) $41,760 
A) $2,610 
B) $10,440 
C) $2,700 
D) $41,760

Question 15

In many companies, responsibility for coordinating the preparation of the budget is assigned to

Accepted Answer

A) the company's independent certified public accountants. 
B) the company's internal auditors. 
C) the company's board of directors. 
D) a budget committee. 
A) the company's independent certified public accountants. 
B) the company's internal auditors. 
C) the company's board of directors. 
D) a budget committee.

Question 16

A production budget should be prepared before the sales budget.

Accepted Answer

A) True 
 B)False

Question 17

The financial budgets include the

Accepted Answer

A) cash budget and the selling and administrative expense budget. 
B) cash budget and the budgeted balance sheet. 
C) budgeted balance sheet and the budgeted income statement. 
D) cash budget and the production budget. 
A) cash budget and the selling and administrative expense budget. 
B) cash budget and the budgeted balance sheet. 
C) budgeted balance sheet and the budgeted income statement. 
D) cash budget and the production budget.

Question 18

Doe Manufacturing plans to sell 6,000 purple lawn chairs during May, 5,700 in June, and 6,000 during July. The company keeps 15% of the next month's sales as ending inventory. How many units should Doe produce during June?

Accepted Answer

A) 5,745 
B) 6,600 
C) 5,655 
D) Not enough information to determine. 
A) 5,745 
B) 6,600 
C) 5,655 
D) Not enough information to determine.

Question 19

The direct materials budget must be completed before the production budget because the quantity of materials available for production must be known.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is not an operating budget?

Accepted Answer

A) Direct labor budget 
B) Sales budget 
C) Production budget 
D) Cash budget 
A) Direct labor budget 
B) Sales budget 
C) Production budget 
D) Cash budget

Long-range planning usually encompasses a period of at least

A benefit of budgeting is that it provides definite objectives for evaluating performance.

On January 1, Kale Company has a beginning cash balance of $42,000. During the year, the company expects cash disbursements of $340,000 and cash receipts of $290,000. If Kale requires an ending cash balance of $40,000, the company must borrow

A budget can be a means of communicating a company's objectives to external parties.

Which of the following expenses would not appear on a selling and administrative expense budget?

Which of the following items does not follow from the adoption of a budget?

Off-Line Co. has 9,000 units in beginning finished goods. The sales budget shows expected sales to be 36,000 units. If the production budget shows that 42,000 units are required for production, what was the desired ending finished goods?

The formula for determining budgeted merchandise purchases is budgeted

Of the following items, which one is not obtained from an individual operating budget?

Burr, Inc.'s direct materials budget shows total cost of direct materials purchases for April $400,000, May $480,000 and June $560,000. Cash payments are 60% in the month of purchase and 40% in the following month. The budgeted cash payments for June are

On January 1, Witt Company has a beginning cash balance of $126,000. During the year, the company expects cash disbursements of $1,020,000 and cash receipts of $870,000. If Witt requires an ending cash balance of $120,000, Witt Company must borrow

In many companies, responsibility for coordinating the preparation of the budget is assigned to

A production budget should be prepared before the sales budget.

The financial budgets include the

Doe Manufacturing plans to sell 6,000 purple lawn chairs during May, 5,700 in June, and 6,000 during July. The company keeps 15% of the next month's sales as ending inventory. How many units should Doe produce during June?

The direct materials budget must be completed before the production budget because the quantity of materials available for production must be known.

Which of the following is not an operating budget?

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing

Cost-Volume-Profit

Cost-Volume-Profit Analysis: Additional Issues

Incremental Analysis

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

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Exam 20: Budgetary Planning

Long-range planning usually encompasses a period of at least

A benefit of budgeting is that it provides definite objectives for evaluating performance.

On January 1, Kale Company has a beginning cash balance of $42,000. During the year, the company expects cash disbursements of $340,000 and cash receipts of $290,000. If Kale requires an ending cash balance of $40,000, the company must borrow

A budget can be a means of communicating a company's objectives to external parties.

Which of the following expenses would not appear on a selling and administrative expense budget?

Which of the following items does not follow from the adoption of a budget?

Off-Line Co. has 9,000 units in beginning finished goods. The sales budget shows expected sales to be 36,000 units. If the production budget shows that 42,000 units are required for production, what was the desired ending finished goods?

The formula for determining budgeted merchandise purchases is budgeted

Of the following items, which one is not obtained from an individual operating budget?

Burr, Inc.'s direct materials budget shows total cost of direct materials purchases for April $400,000, May $480,000 and June $560,000. Cash payments are 60% in the month of purchase and 40% in the following month. The budgeted cash payments for June are

On January 1, Witt Company has a beginning cash balance of $126,000. During the year, the company expects cash disbursements of $1,020,000 and cash receipts of $870,000. If Witt requires an ending cash balance of $120,000, Witt Company must borrow

In many companies, responsibility for coordinating the preparation of the budget is assigned to

A production budget should be prepared before the sales budget.

The financial budgets include the

Doe Manufacturing plans to sell 6,000 purple lawn chairs during May, 5,700 in June, and 6,000 during July. The company keeps 15% of the next month's sales as ending inventory. How many units should Doe produce during June?

The direct materials budget must be completed before the production budget because the quantity of materials available for production must be known.

Which of the following is not an operating budget?

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing

Cost-Volume-Profit

Cost-Volume-Profit Analysis: Additional Issues

Incremental Analysis

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Filters