Question 1

The ________ budget is the only budget stated ONLY in units, not dollars.

Accepted Answer

A) production 
B) sales 
C) direct materials 
D) manufacturing overhead 
A) production 
B) sales 
C) direct materials 
D) manufacturing overhead

Question 2

Which of the following types of companies would combine cost of goods sold, inventory, and purchases into one budget?

Accepted Answer

A) Manufacturing 
B) Merchandising 
C) Service 
D) All of the above 
A) Manufacturing 
B) Merchandising 
C) Service 
D) All of the above

Question 3

Budgeting includes planning for ending inventory.

Accepted Answer

A) True 
 B)False

Question 4

Flawless Lawns Manufacturing produces lawn edgers. The company has a policy that the ending inventory in any month must be 10% of the following month's expected sales. On March 31, Flawless Lawns Manufacturing had 140 lawn edgers in inventory. Flawless Lawns Manufacturing expects to sell the following number of lawn edgers in each of the next four months:   Required:
Prepare a production budget for the second quarter, with a column for each month and for the quarter.

Accepted Answer

The answer of Flawless Lawns Manufacturing produces lawn edgers. The...

Question 5

Terrific Toys Company manufactures and sells children's skateboards. Each skateboard requires four bearings. For September, Terrific Toys Company has budgeted skateboard sales of 530 skateboards, while 570 skateboards are scheduled to be produced. Terrific Toys Company will begin September with 220 bearings in its beginning inventory. How many bearings should Terrific Toys Company purchase for September?

Accepted Answer

A) 310 
B) 2,280 
C) 2,500 
D) 2,060 
A) 310 
B) 2,280 
C) 2,500 
D) 2,060

Question 6

A budget is a quantitative expression of a plan that helps managers coordinate and implement the plan.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is not included in the operating budget?

Accepted Answer

A) Budgeted income statement 
B) Sales budget 
C) Inventory budget 
D) Budgeted balance sheet 
A) Budgeted income statement 
B) Sales budget 
C) Inventory budget 
D) Budgeted balance sheet

Question 8

Sander Enterprises prepared the following sales budget:   The expected gross profit rate is 40% and the inventory at the end of February was $10,000. Desired inventory levels at the end of the month are 20% of the next month's cost of goods sold.
What is the desired ending inventory on May 31?

Accepted Answer

A) $1,120 
B) $1,440 
C) $1,680 
D) $8,400 
A) $1,120 
B) $1,440 
C) $1,680 
D) $8,400

Question 9

Management uses budgeting to express its plans and to assess how well it's reaching its goals.

Accepted Answer

A) True 
 B)False

Question 10

Sam's Toys budgeted sales of $300,000 for the month of November and cost of goods sold equal to 80% of sales. Beginning inventory for November was $50,000 and ending inventory for November is estimated at $55,000. How much are the budgeted purchases for November?

Accepted Answer

A) $245,000 
B) $65,000 
C) $235,000 
D) $135,000 
A) $245,000 
B) $65,000 
C) $235,000 
D) $135,000

Question 11

Timber Run Company has prepared the following forecasts of monthly sales:
   Timber Run Company has decided that the number of units in its inventory at the end of each month should equal 80% of next month's sales. The budgeted cost per unit is $10.
How many units should be in January's beginning inventory?

Accepted Answer

The answer of Timber Run Company has prepared the following...

Question 12

Beloved Baby Company manufactures and sells children's strollers. Each stroller requires eight screws. For September, Beloved Baby Company will begin September with 380 screws in its beginning inventory. Beloved Baby Company has budgeted stroller sales of 530 strollers, while 570 strollers are scheduled to be produced. How many screws should Beloved Baby Company purchase for September?

Accepted Answer

A) 150 
B) 4,180 
C) 4,940 
D) 4,560 
A) 150 
B) 4,180 
C) 4,940 
D) 4,560

Question 13

Cave Hardware's forecasted sales for April, May, June, and July are $200,000, $230,000, $190,000, and $240,000, respectively. Sales are 65% cash and 35% credit with all accounts receivables collected in the month following the sale. Cost of goods sold is 75% of sales and ending inventory is maintained at $60,000 plus 10% of the following month's cost of goods sold. All inventory purchases are paid 22% in the month of purchase and 78% in the following month. What are the budgeted cash payments in June for inventory purchases?

Accepted Answer

A) $495,000 
B) $315,750 
C) $164,385 
D) $167,415 
A) $495,000 
B) $315,750 
C) $164,385 
D) $167,415

Question 14

A rolling budget is a budget that is continuously updated so that the next 12 months of operations are always budgeted.

Accepted Answer

A) True 
 B)False

Question 15

Hewitt Company expects cash sales for July of $15,000, and a 22% monthly increase during August and September. Credit sales of $10,000 in July should be followed by 30% increases during August and September. What are budgeted cash sales and budgeted credit sales for September respectively?

Accepted Answer

A) $19,500 and $12,200 
B) $25,350 and $14,884 
C) $22,326 and $16,900 
D) $18,300 and $13,000 
A) $19,500 and $12,200 
B) $25,350 and $14,884 
C) $22,326 and $16,900 
D) $18,300 and $13,000

Question 16

The first component of the operating budget is the production budget.

Accepted Answer

A) True 
 B)False

Question 17

On the production budget, the number of units to be produced is computed as

Accepted Answer

A) unit sales + desired end inventory + beginning inventory. 
B) unit sales + desired end inventory - beginning inventory. 
C) unit sales - desired end inventory - beginning inventory. 
D) unit sales - desired end inventory + beginning inventory. 
A) unit sales + desired end inventory + beginning inventory. 
B) unit sales + desired end inventory - beginning inventory. 
C) unit sales - desired end inventory - beginning inventory. 
D) unit sales - desired end inventory + beginning inventory.

Question 18

Which of the following is an advantage of zero-based budgeting?

Accepted Answer

A) It is time consuming. 
B) It forces managers to justify every dollar put in the budget, so some expenses may be lower than they were in previous years. 
C) It is labor intensive. 
D) All of the above are advantages. 
A) It is time consuming. 
B) It forces managers to justify every dollar put in the budget, so some expenses may be lower than they were in previous years. 
C) It is labor intensive. 
D) All of the above are advantages.

Question 19

Managers may intentionally build slack into the budget

Accepted Answer

A) to have the resources they need in the event of budget cuts. 
B) to make their performance look worse. 
C) because of certainty about the future. 
D) because of all of the above. 
A) to have the resources they need in the event of budget cuts. 
B) to make their performance look worse. 
C) because of certainty about the future. 
D) because of all of the above.

Question 20

A company should ________ when projecting cash receipts for a given month.

Accepted Answer

A) include only cash collections from sales made in that month 
B) only list COD sales made in that month 
C) only list credit sales made in that month 
D) include cash to be collected in that month regardless of when the sale was made 
A) include only cash collections from sales made in that month 
B) only list COD sales made in that month 
C) only list credit sales made in that month 
D) include cash to be collected in that month regardless of when the sale was made

The ________ budget is the only budget stated ONLY in units, not dollars.

Which of the following types of companies would combine cost of goods sold, inventory, and purchases into one budget?

Budgeting includes planning for ending inventory.

A budget is a quantitative expression of a plan that helps managers coordinate and implement the plan.

Which of the following is not included in the operating budget?

Sander Enterprises prepared the following sales budget: The expected gross profit rate is 40% and the inventory at the end of February was $10,000. Desired inventory levels at the end of the month are 20% of the next month's cost of goods sold. What is the desired ending inventory on May 31?

Management uses budgeting to express its plans and to assess how well it's reaching its goals.

Sam's Toys budgeted sales of $300,000 for the month of November and cost of goods sold equal to 80% of sales. Beginning inventory for November was $50,000 and ending inventory for November is estimated at $55,000. How much are the budgeted purchases for November?

A rolling budget is a budget that is continuously updated so that the next 12 months of operations are always budgeted.

Hewitt Company expects cash sales for July of $15,000, and a 22% monthly increase during August and September. Credit sales of $10,000 in July should be followed by 30% increases during August and September. What are budgeted cash sales and budgeted credit sales for September respectively?

The first component of the operating budget is the production budget.

On the production budget, the number of units to be produced is computed as

Which of the following is an advantage of zero-based budgeting?

Managers may intentionally build slack into the budget

A company should ________ when projecting cash receipts for a given month.

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, Lean Operations, and the Costs of Quality

Process Costing

Cost Behavior

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

Performance Evaluation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

Filters

Exam 9: The Master Budget

The ________ budget is the only budget stated ONLY in units, not dollars.

Which of the following types of companies would combine cost of goods sold, inventory, and purchases into one budget?

Budgeting includes planning for ending inventory.

A budget is a quantitative expression of a plan that helps managers coordinate and implement the plan.

Which of the following is not included in the operating budget?

Sander Enterprises prepared the following sales budget: The expected gross profit rate is 40% and the inventory at the end of February was $10,000. Desired inventory levels at the end of the month are 20% of the next month's cost of goods sold. What is the desired ending inventory on May 31?

Management uses budgeting to express its plans and to assess how well it's reaching its goals.

Sam's Toys budgeted sales of $300,000 for the month of November and cost of goods sold equal to 80% of sales. Beginning inventory for November was $50,000 and ending inventory for November is estimated at $55,000. How much are the budgeted purchases for November?

A rolling budget is a budget that is continuously updated so that the next 12 months of operations are always budgeted.

Hewitt Company expects cash sales for July of $15,000, and a 22% monthly increase during August and September. Credit sales of $10,000 in July should be followed by 30% increases during August and September. What are budgeted cash sales and budgeted credit sales for September respectively?

The first component of the operating budget is the production budget.

On the production budget, the number of units to be produced is computed as

Which of the following is an advantage of zero-based budgeting?

Managers may intentionally build slack into the budget

A company should ________ when projecting cash receipts for a given month.

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, Lean Operations, and the Costs of Quality

Process Costing

Cost Behavior

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

Performance Evaluation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

Filters