Exam 6: Master Budget and Responsibility Accounting

Computer-based systems, like ERP, help managers budget for all manufacturing costs but lack the ability to help managers budget for non-manufacturing costs.

It is best to compare this year's performance with last year's actual performance rather than this year's budget.

Financial planning software packages assist management with ________.

Variances between actual and budgeted amounts inform management about performance relative to the budget.

The Japanese use the term kaizen when referring to________.

How is budgeting for a multinational corporation different than budgeting for a corporation that is strictly domestic?

First Class, Inc., expects to sell 29,000 pool cues for $13 each. Direct materials costs are $3, direct manufacturing labor is $5, and manufacturing overhead is $0.83 per pool cue. The following inventory levels apply to 2019: What are the 2019 budgeted costs for direct materials, direct manufacturing labor, and manufacturing overhead, respectively?

The following information pertains to the January operating budget for Casey Corporation. -Budgeted sales for January $209,000 and February $109,000. -Collections for sales are 60% in the month of sale and 40% the next month. -Gross margin is 35% of sales. -Administrative costs are $10,000 each month. -Beginning accounts receivable is $25,000. -Beginning inventory is $23,000. -Beginning accounts payable is $72,000. (All from inventory purchases.) -Purchases are paid in full the following month. -Desired ending inventory is 20% of next month's cost of goods sold (COGS). At the end of January, budgeted accounts receivable is ________.

A primary consideration in assigning a cost to a responsibility center is ________.

Preparation of the budgeted balance sheet is the final step in preparing the operating budget.

What is budgetary slack? What are the pros and cons of building slack into the budget from the point of view of (a) an employee and (b) a senior manager?

Favata Company has the following information: In addition, the cost of goods sold rate is 70% and the desired inventory level is 30% of next month's cost of sales. Required: Prepare a purchases budget for July through September.

The following information pertains to the January operating budget for Murphy Corporation, a retailer: Budgeted sales are $210,000 for January Collections of sales are 40% in the month of sale and 60% the next month Cost of goods sold averages 66% of sales Merchandise purchases total $159,000 in January Marketing costs are $3,600 each month Distribution costs are $5,300 each month Administrative costs are $10,100 each month For January, the amount budgeted for the nonmanufacturing costs budget is ________.

Which of the following is true of a budget?

The revenues budget is prepared after all other operating budgets are prepared as it is at that point that the amount of projected expenses are known and so a target revenue can be calculated to cover those expenses and provide a target profit.

A budgeting process can facilitate learning in that feedback from budgets can lead to changes in plans and strategies.

Budgeted financial statements are called pro forma statements.

Which of the following is true of budgets when they are administered thoughtfully?

The use of activity-based budgeting is growing because of ________.

Operating plans are generally expressed through long-run budgets.