Question 1

Which of the following information is not shown by a cash budget?

Accepted Answer

A)  Cash inflow 
B)  When cash is likely to be received 
C)  When cash will be deposited into banks 
D)  Cash outflow 
A)  Cash inflow 
B)  When cash is likely to be received 
C)  When cash will be deposited into banks 
D)  Cash outflow

Question 2

Which of the following people are not involved in preparing a budget?

Accepted Answer

A)  The board of directors 
B)  Shareholders 
C)  Sales directors 
D)  Production managers 
A)  The board of directors 
B)  Shareholders 
C)  Sales directors 
D)  Production managers

Question 3

What are the typical types of budgets of a manufacturing company?

Accepted Answer

The budgets of a manufacturing company i

Question 4

Hamilton Manufacturing Company has furnished the following information:   Note: The Accounts Payable account is used only for direct materials.
What was the balance in Hamilton's Accounts Payable account at the beginning of the 1st quarter?

Accepted Answer

A)  $2000 
B)  $10 000 
C)  $22 000 
D)  $28 000 
A)  $2000 
B)  $10 000 
C)  $22 000 
D)  $28 000

Question 5

On comparing actual performance with the budget, the Light Globe Company determined that there was a favourable variance in sales and an unfavourable variance in the cost of goods sold. This means that both actual sales and costs were higher than expected.

Accepted Answer

A) True 
 B)False

Question 6

What is 'responsibility accounting' and how does it contribute to positive budgeting culture?

Accepted Answer

Responsibility accounting assigns respon

Question 7

Operating, random and planning variances are all examples of divergence from actual performance compared to budgeted performance.

Accepted Answer

A) True 
 B)False

Question 8

The direct materials-purchased budget:

Accepted Answer

A)  identifies the quantity of direct materials that will be used to meet production needs during the specified time period. 
B)  identifies the quantity of direct materials that must be purchased to meet production needs during the specified time period. 
C)  uses this formula: beginning inventory plus net purchases minus ending inventory. 
D)  is equal to direct materials needed for production plus beginning inventory minus desired ending inventory. 
A)  identifies the quantity of direct materials that will be used to meet production needs during the specified time period. 
B)  identifies the quantity of direct materials that must be purchased to meet production needs during the specified time period. 
C)  uses this formula: beginning inventory plus net purchases minus ending inventory. 
D)  is equal to direct materials needed for production plus beginning inventory minus desired ending inventory.

Question 9

What is the manufacturing company's production budget, and how is it generated?

Accepted Answer

The production budget is a schedule show

Question 10

A typical production budget consists of:

Accepted Answer

A)  a direct materials budget, a direct labour budget, and a manufacturing overhead budget. 
B)  a direct materials budget, a direct labour budget, manufacturing overhead budget, and an administrative expense budget. 
C)  a direct materials budget and a direct labour budget. 
D)  a manufacturing overhead budget. 
A)  a direct materials budget, a direct labour budget, and a manufacturing overhead budget. 
B)  a direct materials budget, a direct labour budget, manufacturing overhead budget, and an administrative expense budget. 
C)  a direct materials budget and a direct labour budget. 
D)  a manufacturing overhead budget.

Question 11

The first step in the master budgeting process is to prepare:

Accepted Answer

A)  the sales budget. 
B)  the production budget. 
C)  a cash budget. 
D)  a pro forma balance sheet. 
A)  the sales budget. 
B)  the production budget. 
C)  a cash budget. 
D)  a pro forma balance sheet.

Question 12

The master budget normally consists of a budgeted:

Accepted Answer

A)  statement of comprehensive income and statement of cash flows. 
B)  statement of cash flows and balance sheet. 
C)  balance sheet, statement of comprehensive income and statement of cash flows. 
D)  balance sheet and statement of comprehensive income. 
A)  statement of comprehensive income and statement of cash flows. 
B)  statement of cash flows and balance sheet. 
C)  balance sheet, statement of comprehensive income and statement of cash flows. 
D)  balance sheet and statement of comprehensive income.

Question 13

Four months into the new budget it is learned that there will be a major increase in the cost of raw materials. The most appropriate action is to:

Accepted Answer

A)  leave the master budget intact. 
B)  revise the master budget to incorporate the cost increase in raw materials. 
C)  hold the purchasing department responsible for not anticipating the cost increase. 
D)  no action is necessary. 
A)  leave the master budget intact. 
B)  revise the master budget to incorporate the cost increase in raw materials. 
C)  hold the purchasing department responsible for not anticipating the cost increase. 
D)  no action is necessary.

Question 14

A detailed plan that describes the use of financial and operating resources over a specific period of time in the future is a(n):

Accepted Answer

A)  business plan. 
B)  budget. 
C)  statement of comprehensive income. 
D)  balance sheet. 
A)  business plan. 
B)  budget. 
C)  statement of comprehensive income. 
D)  balance sheet.

Question 15

The production of each TV set requires 1.5 direct labour hours. The average cost of each direct labour hour is $10.50. If scheduled production for May is 2000 TVs, what will be the total budgeted cost of direct labour?

Accepted Answer

A)  $3000 
B)  $21 000 
C)  $31 500 
D)  none of the above are correct 
A)  $3000 
B)  $21 000 
C)  $31 500 
D)  none of the above are correct

Question 16

The Marginal Manufacturing Company manufactures one product. Sales and production details are as follows:   What are the estimated sales revenue of Zebras and the number of units of A that are purchased in the current month?

Accepted Answer

A)  $900 000 and 16 000 units. 
B)  $450 000 and 20 000 units. 
C)  $450 000 and 18 000 units. 
D)  $450 000 and 16 000 units 
A)  $900 000 and 16 000 units. 
B)  $450 000 and 20 000 units. 
C)  $450 000 and 18 000 units. 
D)  $450 000 and 16 000 units

Question 17

Which of the following is not an element of a sound budgeting culture?

Accepted Answer

A)  Must expend all the budget before year end 
B)  Regular budgets 
C)  Responsibility accounting 
D)  Continuous review of budgets 
A)  Must expend all the budget before year end 
B)  Regular budgets 
C)  Responsibility accounting 
D)  Continuous review of budgets

Question 18

The production budget is equal to:

Accepted Answer

A)  expected sales in units plus beginning inventory minus desired ending inventory. 
B)  beginning inventory plus net purchases minus ending inventory. 
C)  net purchases plus desired ending inventory. 
D)  expected sales in units plus desired ending inventory minus beginning inventory. 
A)  expected sales in units plus beginning inventory minus desired ending inventory. 
B)  beginning inventory plus net purchases minus ending inventory. 
C)  net purchases plus desired ending inventory. 
D)  expected sales in units plus desired ending inventory minus beginning inventory.

Question 19

Bowden Company forecasts sales for the third quarter at 10 000 units. The desired ending inventory for the second quarter is 2000 units and for the third quarter 3000 units. How many units must be produced in the third quarter?

Accepted Answer

A)  9000 units 
B)  11 000 units 
C)  12 000 units 
D)  13 000 units 
A)  9000 units 
B)  11 000 units 
C)  12 000 units 
D)  13 000 units

Question 20

Mr Sparks is the CEO of a large manufacturing company. He believes strongly that he is the keeper of all the knowledge of what is best for the company. Mr Sparks has traditionally prepared all of the budget estimates himself and then communicated the results to his department managers. In the past several years, however, he has begun to notice that the department managers rarely manage to stay within their budgets and have many excuses for their failures. Mr Sparks has also noticed an increase in his employee turnover, particularly at the managerial level.
Required:

Accepted Answer

The answer of Mr Sparks is the CEO of a...

Which of the following information is not shown by a cash budget?

Which of the following people are not involved in preparing a budget?

What are the typical types of budgets of a manufacturing company?

Hamilton Manufacturing Company has furnished the following information: Note: The Accounts Payable account is used only for direct materials. What was the balance in Hamilton's Accounts Payable account at the beginning of the 1st quarter?

On comparing actual performance with the budget, the Light Globe Company determined that there was a favourable variance in sales and an unfavourable variance in the cost of goods sold. This means that both actual sales and costs were higher than expected.

What is 'responsibility accounting' and how does it contribute to positive budgeting culture?

Operating, random and planning variances are all examples of divergence from actual performance compared to budgeted performance.

The direct materials-purchased budget:

What is the manufacturing company's production budget, and how is it generated?

A typical production budget consists of:

The first step in the master budgeting process is to prepare:

The master budget normally consists of a budgeted:

Four months into the new budget it is learned that there will be a major increase in the cost of raw materials. The most appropriate action is to:

A detailed plan that describes the use of financial and operating resources over a specific period of time in the future is a(n):

The production of each TV set requires 1.5 direct labour hours. The average cost of each direct labour hour is $10.50. If scheduled production for May is 2000 TVs, what will be the total budgeted cost of direct labour?

The Marginal Manufacturing Company manufactures one product. Sales and production details are as follows: What are the estimated sales revenue of Zebras and the number of units of A that are purchased in the current month?

Which of the following is not an element of a sound budgeting culture?

The production budget is equal to:

Bowden Company forecasts sales for the third quarter at 10 000 units. The desired ending inventory for the second quarter is 2000 units and for the third quarter 3000 units. How many units must be produced in the third quarter?

Introduction to Accounting

Types of Organisations and the Financial Reporting Framework

Ethics and Corporate Governance

Wealth and the Measurement of Profit

Presentation of Financial Position and the Worksheet

Presentation of Financial Performance and the Worksheet

Presentation of Cash Flows

Accounting for Selected Assets

Liabilities and Sources of Financing

Financial Statement Analysis

Worksheet to Debits and Credits

An Introduction to Management Accounting: a Strategic Perspective

Performance Measurement and the Balanced Scorecard

Costs and Cost Behaviour

Cost-Volume-Profit Analysis

Accounting for Decision Making: With and Without Resource Constraints

Capital Investment Decisions

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Exam 15: Budgets

Which of the following information is not shown by a cash budget?

Which of the following people are not involved in preparing a budget?

What are the typical types of budgets of a manufacturing company?

Hamilton Manufacturing Company has furnished the following information: Note: The Accounts Payable account is used only for direct materials. What was the balance in Hamilton's Accounts Payable account at the beginning of the 1st quarter?

On comparing actual performance with the budget, the Light Globe Company determined that there was a favourable variance in sales and an unfavourable variance in the cost of goods sold. This means that both actual sales and costs were higher than expected.

What is 'responsibility accounting' and how does it contribute to positive budgeting culture?

Operating, random and planning variances are all examples of divergence from actual performance compared to budgeted performance.

The direct materials-purchased budget:

What is the manufacturing company's production budget, and how is it generated?

A typical production budget consists of:

The first step in the master budgeting process is to prepare:

The master budget normally consists of a budgeted:

Four months into the new budget it is learned that there will be a major increase in the cost of raw materials. The most appropriate action is to:

A detailed plan that describes the use of financial and operating resources over a specific period of time in the future is a(n):

The production of each TV set requires 1.5 direct labour hours. The average cost of each direct labour hour is $10.50. If scheduled production for May is 2000 TVs, what will be the total budgeted cost of direct labour?

The Marginal Manufacturing Company manufactures one product. Sales and production details are as follows: What are the estimated sales revenue of Zebras and the number of units of A that are purchased in the current month?

Which of the following is not an element of a sound budgeting culture?

The production budget is equal to:

Bowden Company forecasts sales for the third quarter at 10 000 units. The desired ending inventory for the second quarter is 2000 units and for the third quarter 3000 units. How many units must be produced in the third quarter?

Introduction to Accounting

Types of Organisations and the Financial Reporting Framework

Ethics and Corporate Governance

Wealth and the Measurement of Profit

Presentation of Financial Position and the Worksheet

Presentation of Financial Performance and the Worksheet

Presentation of Cash Flows

Accounting for Selected Assets

Liabilities and Sources of Financing

Financial Statement Analysis

Worksheet to Debits and Credits

An Introduction to Management Accounting: a Strategic Perspective

Performance Measurement and the Balanced Scorecard

Costs and Cost Behaviour

Cost-Volume-Profit Analysis

Accounting for Decision Making: With and Without Resource Constraints

Capital Investment Decisions

Filters