Question 1

Budgeting for production (i.e., units to be produced in an upcoming budget period):

Accepted Answer

A)  Is simply an extension of the sales forecast. 
B)  Is prepared after the materials purchases budget is prepared. 
C)  Involves the sales budget and both beginning and ending finished goods inventory amounts. 
D)  Is not needed under a JIT production philosophy. 
E)  Is normally the first major step in the master budgeting process. 
A)  Is simply an extension of the sales forecast. 
B)  Is prepared after the materials purchases budget is prepared. 
C)  Involves the sales budget and both beginning and ending finished goods inventory amounts. 
D)  Is not needed under a JIT production philosophy. 
E)  Is normally the first major step in the master budgeting process.

Question 2

A plan that shows the cash balance on hand at the beginning of a budget period, expected cash flow from operations, cash flows from investing activities, cash flows from financing activities, and an ending cash balance is called a(n):

Accepted Answer

A)  Capital budget. 
B)  Financial budget. 
C)  Operating budget. 
D)  Cash budget. 
E)  Cash receipts budget. 
A)  Capital budget. 
B)  Financial budget. 
C)  Operating budget. 
D)  Cash budget. 
E)  Cash receipts budget.

Question 3

Revision of a completed and approved budget:

Accepted Answer

A)  Should be conducted whenever actual events differ significantly from those envisioned when the budget was prepared. 
B)  Reduces employee commitment to achieve budgeted performance. 
C)  Should be discouraged. 
D)  May discourage diligence in its initial preparation. 
E)  Is never needed under Kaizen budgeting. 
A)  Should be conducted whenever actual events differ significantly from those envisioned when the budget was prepared. 
B)  Reduces employee commitment to achieve budgeted performance. 
C)  Should be discouraged. 
D)  May discourage diligence in its initial preparation. 
E)  Is never needed under Kaizen budgeting.

Question 4

Contrast operating budgets and financial budgets.How do these budgets relate to the master budget for a period? What is the culmination of the master budgeting process?

Accepted Answer

Operating budgets deal with uses of reso

Question 5

Tony's Fashions forecasts sales of $300,000 for the quarter ended December 31. The company's gross profit rate averages 20% of sales. Inventory as of September 30 is $100,000. If the December 31st inventory is targeted at $40,000, budgeted purchases for the quarter should be:

Accepted Answer

A)  $140,000. 
B)  $160,000. 
C)  $180,000. 
D)  $200,000. 
E)  $240,000. 
A)  $140,000. 
B)  $160,000. 
C)  $180,000. 
D)  $200,000. 
E)  $240,000.

Question 6

Willard Company anticipates that its fixed manufacturing overhead costs will be $50,000 during the next period. Its variable manufacturing overhead is expected to be $8 per unit produced.

Required:
1. What amount of overhead should be budgeted if the production budget shows that 40,000 units are to be produced?
2. What amount of overhead should be budgeted if the production budget shows that 50,000 units are to be produced?
3. Compute the total overhead cost per unit for requirements 1 and 2.

Accepted Answer

1. Budgeted overhead if 40,000 units are

Question 7

The Shoecraft Company's budgeted sales for January, February, and March of $80,000, $60,000, and $50,000, respectively.Seventy percent of sales are on credit.The company collects 60% of its credit sales in the month following sale, 35% in the second month following sale, and 5% is not collected.Shoecraft mailed all statements to credit customers at the end of the month with a term of 1/30, n/60.What are Shoecraft's expected cash receipts for March?

Accepted Answer

The answer of The Shoecraft Company's budgeted sales for January,...

Question 8

Lighting Inc.'s sales budget showed the following projections for the coming year:   Inventory on December 31 of the current year is expected to be 20,000 units.The quantity of finished goods inventory at the end of each quarter was to equal seven percent of the next quarter's budgeted units to be sold.
Required: Calculate the units to be produced during the third quarter.

Accepted Answer

The answer of Lighting Inc.'s sales budget showed the following...

Question 9

Transcript Company is preparing a cash budget for February.The company has $150,000 cash at the beginning of February and anticipates total sales of $800,000, consisting of 25% cash sales and 75% credit card sales.The bank charges 3 percent for credit card transactions.The company sets its selling price at 160 percent of the cost of purchases and pays for each month's purchases at the end of the month.Other cash disbursements are $20,000 per month plus 4% of total sales.In addition, a $600,000 note will be due in February for equipment purchased last August.Transcript Company has an agreement with its bank to maintain a cash balance of $100,000.
Required: What amount, if any, must the company borrow during February?

Accepted Answer

The answer of Transcript Company is preparing a cash budget...

Question 10

Discuss the components of each of the following manufacturing cost budgets:
1.Production budget
2.Direct materials purchases budget
3.Direct labor budget
4.Factory overhead budget
5.Cost of goods manufactured budget
6.Cost of goods sold budget.

Accepted Answer

1.A production budget-this schedule show

Question 11

Which of the following is not a characteristic of Kaizen budgeting?

Accepted Answer

A)  These budgets reflect continuous-improvement standards. 
B)  These budgets adjust required resource demands based on targeted efficiency and productivity gains. 
C)  This approach to budgeting can be used in conjunction with both traditional and activity-based budgeting. 
D)  This approach cannot be used externally (e.g., to budget supplier costs). 
E)  Cost decreases in the budget are the result of performing the activities more efficiently and with higher quality. 
A)  These budgets reflect continuous-improvement standards. 
B)  These budgets adjust required resource demands based on targeted efficiency and productivity gains. 
C)  This approach to budgeting can be used in conjunction with both traditional and activity-based budgeting. 
D)  This approach cannot be used externally (e.g., to budget supplier costs). 
E)  Cost decreases in the budget are the result of performing the activities more efficiently and with higher quality.

Question 12

A significant advantage of using either an activity-based budgeting (ABB) or a time-driven activity-based budgeting (TDABB) system is:

Accepted Answer

A)  Reduction in the cost of developing budget amounts. 
B)  Estimation of the cost of unused capacity, as a by-product of the budgeting process. 
C)  Increased levels of "budgetary slack," which has a positive influence on motivation. 
D)  Elimination of the need to generate a sales forecast for the upcoming period. 
E)  The incorporation of continuous-improvement standards within the budgets. 
A)  Reduction in the cost of developing budget amounts. 
B)  Estimation of the cost of unused capacity, as a by-product of the budgeting process. 
C)  Increased levels of "budgetary slack," which has a positive influence on motivation. 
D)  Elimination of the need to generate a sales forecast for the upcoming period. 
E)  The incorporation of continuous-improvement standards within the budgets.

Question 13

Zero-base budgeting (ZBB):

Accepted Answer

A)  Involves the review of changes made to an organization's original budget. 
B)  Does not provide a projection of annual expenditures. 
C)  Has as the primary objective to reduce budget expenditures to zero. 
D)  Involves rigorous review of each cost item before inclusion in the budget. 
E)  Emphasizes zero increase in expenditures. 
A)  Involves the review of changes made to an organization's original budget. 
B)  Does not provide a projection of annual expenditures. 
C)  Has as the primary objective to reduce budget expenditures to zero. 
D)  Involves rigorous review of each cost item before inclusion in the budget. 
E)  Emphasizes zero increase in expenditures.

Question 14

Blake Company has $15,000 cash at the beginning of June and anticipates $50,000 in cash receipts and $34,500 in cash disbursements. The company requires a minimum cash balance of $20,000. Any excess cash over the minimum desired balance is used to pay down debts. Blake has an agreement with its bank to borrow as needed or to repay loans as funds become available. As of May 31, the company owes $15,000 to the bank. The balance of the loan on June 30 will be:

Accepted Answer

A)  $4,500. 
B)  $9,500. 
C)  $15,000. 
D)  $19,500. 
E)  $25,500. 
A)  $4,500. 
B)  $9,500. 
C)  $15,000. 
D)  $19,500. 
E)  $25,500.

Question 15

Consistency between goals of the firm and the goals of its employees is referred to as goal:

Accepted Answer

A)  optimization. 
B)  conformance. 
C)  congruence. 
D)  internalization. 
E)  compensation. 
A)  optimization. 
B)  conformance. 
C)  congruence. 
D)  internalization. 
E)  compensation.

Question 16

Doanne Food Processing expects to have 36,000 pounds of raw materials inventory on hand on March 31, the end of the current year. The company budgets the following production (in units) for April through July, inclusive: At the end of each month the firm desires its ending raw material inventory to be 10% of the next month's production needs. Each finished unit requires three pounds of raw materials.
Doanne's budgeted purchases for raw materials (in pounds) during April should be:

Accepted Answer

A)  224,000. 
B)  360,000. 
C)  363,000. 
D)  399,000. 
E)  435,000. 
A)  224,000. 
B)  360,000. 
C)  363,000. 
D)  399,000. 
E)  435,000.

Question 17

The Johann's Professional Service Company expects 70% of sales for cash and 30% on credit. The company collects 80% of its credit sales in the month following sale, 15% in the second month following sale, and 5% are not collected (that is, they are "bad debts"). Expected sales for June, July, and August are $48,000, $54,000, and $44,000, respectively. What are the company's expected total cash receipts in August?

Accepted Answer

A)  $45,920. 
B)  $61,400. 
C)  $87,600. 
D)  $50,400. 
E)  $15,120. 
A)  $45,920. 
B)  $61,400. 
C)  $87,600. 
D)  $50,400. 
E)  $15,120.

Question 18

Allmakes Software budgeted August purchases of new software at $140,000.The store had software costing $6,000 on hand at the beginning of August, and to cover part of anticipated back-to-school sales in September they expect to have $15,000 of software on hand at the end of August.
Required: What was the budgeted cost of goods sold for August?

Accepted Answer

The answer of Allmakes Software budgeted August purchases of new...

Question 19

Papa Joe, Inc., is preparing its budget for the second quarter of the calendar year.The following unit sales data have been forecasted:   Desired ending inventory each month: 30% of next month's estimated sales (in units)
Required:
1.How many units should be budgeted for production in June?
2.How many units should be budgeted for production in the second quarter?

Accepted Answer

The answer of Papa Joe, Inc., is preparing its budget...

Question 20

A master budget is typically prepared for:

Accepted Answer

A)  Coordinating activities among subunits of an organization. 
B)  Top management only. 
C)  Strategic planning purposes only. 
D)  Strategic business units only. 
E)  Operating activities only. 
A)  Coordinating activities among subunits of an organization. 
B)  Top management only. 
C)  Strategic planning purposes only. 
D)  Strategic business units only. 
E)  Operating activities only.

Budgeting for production (i.e., units to be produced in an upcoming budget period):

A plan that shows the cash balance on hand at the beginning of a budget period, expected cash flow from operations, cash flows from investing activities, cash flows from financing activities, and an ending cash balance is called a(n):

Revision of a completed and approved budget:

Contrast operating budgets and financial budgets.How do these budgets relate to the master budget for a period? What is the culmination of the master budgeting process?

Tony's Fashions forecasts sales of $300,000 for the quarter ended December 31. The company's gross profit rate averages 20% of sales. Inventory as of September 30 is $100,000. If the December 31st inventory is targeted at $40,000, budgeted purchases for the quarter should be:

Discuss the components of each of the following manufacturing cost budgets: 1.Production budget 2.Direct materials purchases budget 3.Direct labor budget 4.Factory overhead budget 5.Cost of goods manufactured budget 6.Cost of goods sold budget.

Which of the following is not a characteristic of Kaizen budgeting?

A significant advantage of using either an activity-based budgeting (ABB) or a time-driven activity-based budgeting (TDABB) system is:

Zero-base budgeting (ZBB):

Consistency between goals of the firm and the goals of its employees is referred to as goal:

A master budget is typically prepared for:

Cost Management and Strategy

Implementing Strategy: The Value Chain, the Balanced Scorecard, and the Strategy Map

Basic Cost Management Concepts

Job Costing

Activity-Based Costing and Customer Profitability Analysis

Process Costing

Cost Allocation: Departments, Joint Products, and By-Products

Cost Estimation

Short-Term Profit Planning: Cost-Volume-Profit CVP Analysis

Decision Making With a Strategic Emphasis

Strategy and the Analysis of Capital Investments

Cost Planning for the Product Life Cycle: Target Costing, Theory of Constraints, and Strategic Pricing

Operational Performance Measurement: Sales, Direct-Cost Variances, and the Role of Nonfinancial Performance Measures

Operational Performance Measurement: Indirect-Cost Variances and Resource-Capacity Management

Operational Performance Measurement: Further Analysis of Productivity and Sales

The Management and Control of Quality

Strategic Performance Measurement: Cost Centers, Profit Centers, and the Balanced Scorecard

Strategic Performance Measurement: Investment Centers and Transfer Pricing

Management Compensation, Business Analysis, and Business Valuation

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Exam 10: Strategy and the Master Budget

Budgeting for production (i.e., units to be produced in an upcoming budget period):

A plan that shows the cash balance on hand at the beginning of a budget period, expected cash flow from operations, cash flows from investing activities, cash flows from financing activities, and an ending cash balance is called a(n):

Revision of a completed and approved budget:

Contrast operating budgets and financial budgets.How do these budgets relate to the master budget for a period? What is the culmination of the master budgeting process?

Tony's Fashions forecasts sales of $300,000 for the quarter ended December 31. The company's gross profit rate averages 20% of sales. Inventory as of September 30 is $100,000. If the December 31st inventory is targeted at $40,000, budgeted purchases for the quarter should be:

Discuss the components of each of the following manufacturing cost budgets: 1.Production budget 2.Direct materials purchases budget 3.Direct labor budget 4.Factory overhead budget 5.Cost of goods manufactured budget 6.Cost of goods sold budget.

Which of the following is not a characteristic of Kaizen budgeting?

A significant advantage of using either an activity-based budgeting (ABB) or a time-driven activity-based budgeting (TDABB) system is:

Zero-base budgeting (ZBB):

Consistency between goals of the firm and the goals of its employees is referred to as goal:

A master budget is typically prepared for:

Cost Management and Strategy

Implementing Strategy: The Value Chain, the Balanced Scorecard, and the Strategy Map

Basic Cost Management Concepts

Job Costing

Activity-Based Costing and Customer Profitability Analysis

Process Costing

Cost Allocation: Departments, Joint Products, and By-Products

Cost Estimation

Short-Term Profit Planning: Cost-Volume-Profit CVP Analysis

Decision Making With a Strategic Emphasis

Strategy and the Analysis of Capital Investments

Cost Planning for the Product Life Cycle: Target Costing, Theory of Constraints, and Strategic Pricing

Operational Performance Measurement: Sales, Direct-Cost Variances, and the Role of Nonfinancial Performance Measures

Operational Performance Measurement: Indirect-Cost Variances and Resource-Capacity Management

Operational Performance Measurement: Further Analysis of Productivity and Sales

The Management and Control of Quality

Strategic Performance Measurement: Cost Centers, Profit Centers, and the Balanced Scorecard

Strategic Performance Measurement: Investment Centers and Transfer Pricing

Management Compensation, Business Analysis, and Business Valuation

Filters