Question 1

An overly optimistic sales budget may result in

Accepted Answer

A) increases in selling prices late in the year. 
B) insufficient inventories. 
C) increased sales during the year. 
D) excessive inventories. 
A) increases in selling prices late in the year. 
B) insufficient inventories. 
C) increased sales during the year. 
D) excessive inventories.

Question 2

Which is true of budgets?

Accepted Answer

A) They are voted on and approved by stockholders. 
B) They are used in the planning, but not in the control, process. 
C) There is a standard form and structure for budgets. 
D) They are used in performance evaluation. 
A) They are voted on and approved by stockholders. 
B) They are used in the planning, but not in the control, process. 
C) There is a standard form and structure for budgets. 
D) They are used in performance evaluation.

Question 3

The budgeted income statement indicates the expected profitability of operations for the next year.

Accepted Answer

A) True 
 B)False

Question 4

In the direct materials budget, the quantity of direct materials to be purchased is computed by adding direct materials required for production to

Accepted Answer

A) desired ending direct materials. 
B) beginning direct materials. 
C) desired ending direct materials less beginning direct materials. 
D) beginning direct materials less desired ending direct materials. 
A) desired ending direct materials. 
B) beginning direct materials. 
C) desired ending direct materials less beginning direct materials. 
D) beginning direct materials less desired ending direct materials.

Question 5

If a company has adopted continuous budgeting, the budget will show plans for

Accepted Answer

A) every day. 
B) a full year ahead. 
C) the current year and the next year. 
D) at least five years. 
A) every day. 
B) a full year ahead. 
C) the current year and the next year. 
D) at least five years.

Question 6

For a merchandiser, the starting point in the development of the master budget is the

Accepted Answer

A) cash budget. 
B) sales budget. 
C) selling and administrative expenses budget. 
D) budgeted income statement. 
A) cash budget. 
B) sales budget. 
C) selling and administrative expenses budget. 
D) budgeted income statement.

Question 7

Budget development for the coming year usually starts

Accepted Answer

A) a year in advance. 
B) the first month of the year to be budgeted. 
C) several months before the end of the current year. 
D) the last month of the previous year. 
A) a year in advance. 
B) the first month of the year to be budgeted. 
C) several months before the end of the current year. 
D) the last month of the previous year.

Question 8

Strand Company is planning to sell 400 buckets and produce 380 buckets during March. Each bucket requires 500 grams of plastic and one-half hour of direct labor. Plastic costs $10 per 500 grams and employees of the company are paid $15.00 per hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Strand has 300 kilos of plastic in beginning inventory and wants to have 200 kilos in ending inventory. How much is the total amount of budgeted direct labor for March?

Accepted Answer

A) $3,000 
B) $6,000 
C) $2,850 
D) $5,7000 
A) $3,000 
B) $6,000 
C) $2,850 
D) $5,7000

Question 9

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

Accepted Answer

A) Freight-out 
B) Office salaries 
C) Property taxes 
D) Depreciation 
A) Freight-out 
B) Office salaries 
C) Property taxes 
D) Depreciation

Question 10

The production budget shows expected unit sales are 100,000. The required production units are 104,000. What are the beginning and desired ending finished goods units, respectively? $$\begin{array} { c c c } 
& \text { Beginning Units } & \text { Ending Units } \
\text { a. } & 10,000 & 6,000 \
\text { b. } & 6,000 & 10,000 \
\text { c. } & 4,000 & 10,000 \
\text { d. } & 10,000 & 4,000
\end{array}$$

Accepted Answer

The answer of The production budget shows expected unit sales...

Question 11

A purchases budget is used instead of a production budget by

Accepted Answer

A) merchandising companies. 
B) service enterprises. 
C) not-for-profit organizations. 
D) manufacturing companies. 
A) merchandising companies. 
B) service enterprises. 
C) not-for-profit organizations. 
D) manufacturing companies.

Question 12

A budget can facilitate the coordination of activities among the segments of a large company.

Accepted Answer

A) True 
 B)False

Question 13

Beginning cash balance plus total receipts

Accepted Answer

A) equals ending cash balance. 
B) must equal total disbursements. 
C) equals total available cash. 
D) is the excess of available cash over disbursements. 
A) equals ending cash balance. 
B) must equal total disbursements. 
C) equals total available cash. 
D) is the excess of available cash over disbursements.

Question 14

Haft Construction Company determines that 54,000 pounds of direct materials are needed for production in July. There are 3,200 pounds of direct materials on hand at July 1 and the desired ending inventory is 2,800 pounds. If the cost per unit of direct materials is $3, what is the budgeted total cost of direct materials purchases?

Accepted Answer

A) 158,400. 
B) 160,800. 
C) 163,200. 
D) 165,600. 
A) 158,400. 
B) 160,800. 
C) 163,200. 
D) 165,600.

Question 15

Which of the following is not a financial budget?

Accepted Answer

A) Capital expenditure budget 
B) Cash budget 
C) Manufacturing overhead budget 
D) Budgeted balance sheet 
A) Capital expenditure budget 
B) Cash budget 
C) Manufacturing overhead budget 
D) Budgeted balance sheet

Question 16

Why are budgets useful in the planning process?

Accepted Answer

A) They provide management with information about the company's past performance. 
B) They help communicate goals and provide a basis for evaluation. 
C) They guarantee the company will be profitable if it meets its objectives. 
D) They enable the budget committee to earn their paycheck. 
A) They provide management with information about the company's past performance. 
B) They help communicate goals and provide a basis for evaluation. 
C) They guarantee the company will be profitable if it meets its objectives. 
D) They enable the budget committee to earn their paycheck.

Question 17

Which one of the following sections would not appear on a cash budget?

Accepted Answer

A) Cash receipts 
B) Financing 
C) Investing 
D) Cash disbursements 
A) Cash receipts 
B) Financing 
C) Investing 
D) Cash disbursements

Question 18

In a production budget, total required production units are the budgeted sales units plus

Accepted Answer

A) beginning finished goods units. 
B) desired ending finished goods units. 
C) desired ending finished goods units plus beginning finished goods units. 
D) desired ending finished goods units minus beginning finished goods units. 
A) beginning finished goods units. 
B) desired ending finished goods units. 
C) desired ending finished goods units plus beginning finished goods units. 
D) desired ending finished goods units minus beginning finished goods units.

An overly optimistic sales budget may result in

Which is true of budgets?

The budgeted income statement indicates the expected profitability of operations for the next year.

In the direct materials budget, the quantity of direct materials to be purchased is computed by adding direct materials required for production to

If a company has adopted continuous budgeting, the budget will show plans for

For a merchandiser, the starting point in the development of the master budget is the

Budget development for the coming year usually starts

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

The production budget shows expected unit sales are 100,000. The required production units are 104,000. What are the beginning and desired ending finished goods units, respectively? Beginning Units Ending Units a. 10,000 6,000 b. 6,000 10,000 c. 4,000 10,000 d. 10,000 4,000

A purchases budget is used instead of a production budget by

A budget can facilitate the coordination of activities among the segments of a large company.

Beginning cash balance plus total receipts

Which of the following is not a financial budget?

Why are budgets useful in the planning process?

Which one of the following sections would not appear on a cash budget?

In a production budget, total required production units are the budgeted sales units plus

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

An overly optimistic sales budget may result in

Which is true of budgets?

The budgeted income statement indicates the expected profitability of operations for the next year.

In the direct materials budget, the quantity of direct materials to be purchased is computed by adding direct materials required for production to

If a company has adopted continuous budgeting, the budget will show plans for

For a merchandiser, the starting point in the development of the master budget is the

Budget development for the coming year usually starts

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

The production budget shows expected unit sales are 100,000. The required production units are 104,000. What are the beginning and desired ending finished goods units, respectively? Beginning Units Ending Units a. 10,000 6,000 b. 6,000 10,000 c. 4,000 10,000 d. 10,000 4,000

A purchases budget is used instead of a production budget by

A budget can facilitate the coordination of activities among the segments of a large company.

Beginning cash balance plus total receipts

Which of the following is not a financial budget?

Why are budgets useful in the planning process?

Which one of the following sections would not appear on a cash budget?

In a production budget, total required production units are the budgeted sales units plus

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