Question 1

The budgeting process does not involve which of the following activities?

Accepted Answer

A)  Specific goals are established. 
B)  Periodic comparison of actual results to goals. 
C)  Execution of plans to achieve goals. 
D)  Increase in sales by increasing marketing efforts. 
A)  Specific goals are established. 
B)  Periodic comparison of actual results to goals. 
C)  Execution of plans to achieve goals. 
D)  Increase in sales by increasing marketing efforts.

Question 2

Match the phrase that follows with the term a-e) it describes.
-estimates the number of units to be manufactured to meet sales and inventory levels

Accepted Answer

A) static budget 
B) flexible budget 
C) master budget 
D) sales budget 
E) production budget 
A) static budget 
B) flexible budget 
C) master budget 
D) sales budget 
E) production budget

Question 3

The production budgets are used to prepare which of the following budgets?

Accepted Answer

A)  operating expenses 
B)  direct materials purchases, direct labor cost, and factory overhead cost 
C)  sales in dollars 
D)  sales in units 
A)  operating expenses 
B)  direct materials purchases, direct labor cost, and factory overhead cost 
C)  sales in dollars 
D)  sales in units

Question 4

Budget preparation is best determined in a top-down managerial approach.

Accepted Answer

A) True 
 B)False

Question 5

Supervisor salaries, maintenance, and indirect factory wages would normally appear in the operating expenses budget.

Accepted Answer

A) True 
 B)False

Question 6

Detailed supplemental schedules based on department responsibility are often prepared for major items in the operating expenses budget.

Accepted Answer

A) True 
 B)False

Question 7

Principal components of a master budget include

Accepted Answer

A)  production budget 
B)  sales budget 
C)  capital expenditures budget 
D)  all of these 
A)  production budget 
B)  sales budget 
C)  capital expenditures budget 
D)  all of these

Question 8

Match the phrase that follows with the term a-e) it describes.
-integrated set of operating and financing budgets for a period of time

Accepted Answer

A) static budget 
B) flexible budget 
C) master budget 
D) sales budget 
E) production budget 
A) static budget 
B) flexible budget 
C) master budget 
D) sales budget 
E) production budget

Question 9

The dollar amount of Material C used in production during the year is

Accepted Answer

A)  $746,400 
B)  $724,800 
C)  $824,400 
D)  $758,160 
A)  $746,400 
B)  $724,800 
C)  $824,400 
D)  $758,160

Question 10

-The number of pounds of materials A and B required for July production is

Accepted Answer

A)  216,000 lbs. of A; 36,000 lbs. of B 
B)  216,000 lbs. of A; 72,000 lbs. of B 
C)  234,000 lbs. of A; 39,000 lbs. of B 
D)  225,000 lbs. of A; 37,500 lbs. of B 
A)  216,000 lbs. of A; 36,000 lbs. of B 
B)  216,000 lbs. of A; 72,000 lbs. of B 
C)  234,000 lbs. of A; 39,000 lbs. of B 
D)  225,000 lbs. of A; 37,500 lbs. of B

Question 11

A budget procedure that provides for the maintenance at all times of a twelve-month projection into the future is called master budgeting.

Accepted Answer

A) True 
 B)False

Question 12

Match each phrase that follows with the term a-e) it describes.
-setting goals

Accepted Answer

A) planning 
B) directing 
C) controlling 
D) budget slack 
E) goal conflict 
A) planning 
B) directing 
C) controlling 
D) budget slack 
E) goal conflict

Question 13

For February, sales revenue is $700,000; sales commissions are 5% of sales; the sales manager's salary is $96,000; advertising expenses are $90,000; shipping expenses total 2% of sales; and miscellaneous selling expenses are $2,500 plus 1/2 of 1% of sales. Total selling expenses for the month of February are

Accepted Answer

A)  $161,000 
B)  $237,500 
C)  $235,000 
D)  $241,000 
A)  $161,000 
B)  $237,500 
C)  $235,000 
D)  $241,000

Question 14

To meet projected annual sales, Bluegill Manufacturers, Inc. needs to produce 75,000 machines for the year. The estimated January 1 inventory is 7,000 units, and the desired December 31 inventory is 12,000 units. What are projected sales units for the year?

Accepted Answer

The answer of To meet projected annual sales, Bluegill Manufacturers,...

Question 15

The budget that summarizes future plans for the acquisition of fixed assets is

Accepted Answer

A)  direct materials purchases budget 
B)  production budget 
C)  sales budget 
D)  capital expenditures budget 
A)  direct materials purchases budget 
B)  production budget 
C)  sales budget 
D)  capital expenditures budget

Question 16

An October sales forecast projects 7,000 units are going to be sold at a price of $11.50 per unit. The desired ending inventory in units is 15% higher than the beginning inventory of 1,000 units. Total October sales are anticipated to be

Accepted Answer

A)  $69,000 
B)  $80,500 
C)  $70,000 
D)  $92,000 
A)  $69,000 
B)  $80,500 
C)  $70,000 
D)  $92,000

Question 17

A company's history indicates that 20% of its sales are for cash and the rest are on credit. Collections on credit sales are 20% in the month of the sale, 50% in the next month, 25% the following month, and 5% is uncollectible. Projected sales for December, January, and February are $60,000, $85,000, and $95,000, respectively. The February expected cash receipts from all current and prior credit sales is

Accepted Answer

A)  $61,200 
B)  $57,000 
C)  $66,400 
D)  $90,250 
A)  $61,200 
B)  $57,000 
C)  $66,400 
D)  $90,250

Question 18

The number of pounds of Materials A and B required for August production is

Accepted Answer

A)  216,000 lbs. of A; 72,000 lbs. of B 
B)  216,000 lbs. of A; 36,000 lbs. of B 
C)  225,000 lbs. of A; 37,500 lbs. of B 
D)  234,000 lbs. of A; 39,000 lbs. of B 
A)  216,000 lbs. of A; 72,000 lbs. of B 
B)  216,000 lbs. of A; 36,000 lbs. of B 
C)  225,000 lbs. of A; 37,500 lbs. of B 
D)  234,000 lbs. of A; 39,000 lbs. of B

Question 19

The first budget to be prepared is usually the sales budget.

Accepted Answer

A) True 
 B)False

Question 20

The budget process involves doing all of the following except

Accepted Answer

A)  establishing specific goals 
B)  executing plans to achieve the goals 
C)  periodically comparing actual results with the goals 
D)  dismissing all managers who fail to achieve operational goals specified in the budget 
A)  establishing specific goals 
B)  executing plans to achieve the goals 
C)  periodically comparing actual results with the goals 
D)  dismissing all managers who fail to achieve operational goals specified in the budget

Exam 21: Budgeting

The budgeting process does not involve which of the following activities?

Match the phrase that follows with the term a-e) it describes. -estimates the number of units to be manufactured to meet sales and inventory levels

The production budgets are used to prepare which of the following budgets?

Budget preparation is best determined in a top-down managerial approach.

Supervisor salaries, maintenance, and indirect factory wages would normally appear in the operating expenses budget.

Detailed supplemental schedules based on department responsibility are often prepared for major items in the operating expenses budget.

Principal components of a master budget include

Match the phrase that follows with the term a-e) it describes. -integrated set of operating and financing budgets for a period of time

The dollar amount of Material C used in production during the year is

-The number of pounds of materials A and B required for July production is

A budget procedure that provides for the maintenance at all times of a twelve-month projection into the future is called master budgeting.

Match each phrase that follows with the term a-e) it describes. -setting goals

To meet projected annual sales, Bluegill Manufacturers, Inc. needs to produce 75,000 machines for the year. The estimated January 1 inventory is 7,000 units, and the desired December 31 inventory is 12,000 units. What are projected sales units for the year?

The budget that summarizes future plans for the acquisition of fixed assets is

An October sales forecast projects 7,000 units are going to be sold at a price of $11.50 per unit. The desired ending inventory in units is 15% higher than the beginning inventory of 1,000 units. Total October sales are anticipated to be

The number of pounds of Materials A and B required for August production is

The first budget to be prepared is usually the sales budget.

The budget process involves doing all of the following except

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis, Product Pricing, and Activity-Based Costing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Lean Principles, Lean Accounting, and Activity Analysis

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