Question 1

Balances for Accounts Receivable and Sales Discounts are projected after the cash collections schedule is prepared.

Accepted Answer

A) True 
 B)False

Question 2

In a manufacturing organization,the cash budget is prepared immediately after the sales budget.

Accepted Answer

A) True 
 B)False

Question 3

The starting point for any master budget is the _________________________.

Accepted Answer

The answer of The starting point for any master budget...

Question 4

Beasley Company
Beasley Company prepared a cash budget by quarters for the upcoming year.Missing data amounts are indicated with question marks or lower case letters;these lower case letters will be referred to in the questions that follow.
Beasley requires a minimum balance of $10,000 to start a quarter.
All data are in thousands.
Beasley Corporation
Cash Budget
                    QTR 1       QTR 2      QTR 3       QTR 4               Cash balance, beginning        $16       $ e       $13       $10              Add collections from customers        a        70        67       80               Total cash available       ?       ?       80       90              Less disbursements:                                           Purchase of inventory        31       c       40       35              Operating expenses        25       22       ?       15                Equipment purchases       10       14       19       0                Dividends       0       6       0       5              Total disbursements        66       ?       f       55               Excess (deficiency) of cash available over disbursements       7       17        (2)        35               Financing:                                            Borrowings:       b       --       12       --                Repayments (including interest)       --       d       --       (12)              Total financing        ?       ?       12       (12)              Cash balance, ending        $10       $?       $10       $23                     ====        ====       ====       ====      
Refer to Beasley Company.The repayment (including interest)of financing during the second quarter (item d)is:

Accepted Answer

A) $ 4 
B) $ 0 
C) $17 
D) $ 7 
A) $ 4 
B) $ 0 
C) $17 
D) $ 7

Question 5

The effect of capital expenditures on the master budget is reflected through periodic depreciation charges in the cash outflow portion.

Accepted Answer

A) True 
 B)False

Question 6

The amount of raw materials that must be purchased can be computed by the following formula: Ending inventory + Materials required - Beginning inventory.

Accepted Answer

A) True 
 B)False

Question 7

A budget that indicates the funds to be generated or consumed during the period is referred to as a ______________________________.

Accepted Answer

The answer of A budget that indicates the funds to...

Question 8

A budget that includes a 12-month planning period at all times is called a ____ budget.

Accepted Answer

A) pro forma 
B) flexible 
C) master 
D) continuous 
A) pro forma 
B) flexible 
C) master 
D) continuous

Question 9

Hennessey Company manufactures card tables.The company has a policy of maintaining a finished goods inventory equal to 40 percent of the next month's planned sales.Each card table requires 3 hours of labor.The budgeted labor rate for the coming year is $13 per hour.Planned sales for the months of April,May,and June are respectively 4,000;5,000;and 3,000 units.What is Hennessey Company's budgeted direct labor cost for May?

Accepted Answer

A) $54,600 
B) $163,800 
C) $226,200 
D) $179,400 
A) $54,600 
B) $163,800 
C) $226,200 
D) $179,400

Question 10

Top management can reduce slack by using a bonus system to link performance to the budget.

Accepted Answer

A) True 
 B)False

Question 11

The financial budget is prepared after the operating budget.

Accepted Answer

A) True 
 B)False

Question 12

Budgeted sales for the first six months for Pratt Company are listed below:
                   JANUARY        FEBRUARY      MARCH       APRIL       MAY        JUNE              UNITS:        5,000       6,000      9,000      8,000       6,000       5,000      
Pratt Company has a policy of maintaining an inventory of finished goods equal to 30 percent of the next month's budgeted sales.If Pratt Company plans to produce 8,000 units in June,what are budgeted sales for July?

Accepted Answer

A) 3,000 units 
B) 4,500 units 
C) 10,000 units 
D) 15,000 units 
A) 3,000 units 
B) 4,500 units 
C) 10,000 units 
D) 15,000 units

Question 13

Budgeted production for a period is equal to

Accepted Answer

A) the beginning inventory + sales - the ending inventory. 
B) the ending inventory + sales - the beginning inventory. 
C) the ending inventory + the beginning inventory - sales. 
D) sales - the beginning inventory + purchases. 
A) the beginning inventory + sales - the ending inventory. 
B) the ending inventory + sales - the beginning inventory. 
C) the ending inventory + the beginning inventory - sales. 
D) sales - the beginning inventory + purchases.

Question 14

Mercy Medical Center has provided you with the following budget information for April:
$\begin{array}{ll}
\text { Cash collections } & \$ 876,000 \
\text { April } 1 \text { cash balance } & 23,000 \
\text { Cash disbursements } & 978,600
\end{array}$

Mercy has a policy of maintaining a minimum cash balance of $20,000 and borrows only in $1,000 increments.How much will Mercy borrow in April?

Accepted Answer

A) $80,000 
B) $79,600 
C) $99,000 
D) $100,000 
A) $80,000 
B) $79,600 
C) $99,000 
D) $100,000

Question 15

Explain why managers might want to build slack into a budget.

Accepted Answer

Building slack into the budget allows ma

Question 16

Which of the following represents a proper sequencing in which the budgets below are prepared?

Accepted Answer

A) Direct Material Purchases,Cash,Sales 
B) Production,Sales,Income Statement 
C) Sales,Balance Sheet,Direct Labor 
D) Sales,Production,Manufacturing Overhead 
A) Direct Material Purchases,Cash,Sales 
B) Production,Sales,Income Statement 
C) Sales,Balance Sheet,Direct Labor 
D) Sales,Production,Manufacturing Overhead

Question 17

For the month of March,Robertson Corporation.predicts total cash collections to be $1.5 million.Also for March,Robertson Corporation.estimates that its beginning cash balance will be $60,000 and that it will borrow cash in the amount of $80,000.If Robertson Corporation.estimates an ending cash balance of $40,000 for March,what must its projected cash disbursements be?

Accepted Answer

A) $1,520,000 
B) $1,580,000 
C) $1,600,000 
D) $1,640,000 
A) $1,520,000 
B) $1,580,000 
C) $1,600,000 
D) $1,640,000

Question 18

Slack in operating budgets

Accepted Answer

A) results from unintentional managerial acts. 
B) makes an organization more efficient and effective. 
C) requires managers to work harder to achieve the budget. 
D) is greater when managers are allowed to participate in the budgeting process. 
A) results from unintentional managerial acts. 
B) makes an organization more efficient and effective. 
C) requires managers to work harder to achieve the budget. 
D) is greater when managers are allowed to participate in the budgeting process.

Question 19

Which of the following is usually perceived as being the master budget's greatest advantage to management?

Accepted Answer

A) performance analysis 
B) increased communication 
C) increased coordination 
D) required planning 
A) performance analysis 
B) increased communication 
C) increased coordination 
D) required planning

Question 20

A participatory budget is developed by both top management and operating personnel.

Accepted Answer

A) True 
 B)False

Balances for Accounts Receivable and Sales Discounts are projected after the cash collections schedule is prepared.

In a manufacturing organization,the cash budget is prepared immediately after the sales budget.

The starting point for any master budget is the _________________________.

The effect of capital expenditures on the master budget is reflected through periodic depreciation charges in the cash outflow portion.

The amount of raw materials that must be purchased can be computed by the following formula: Ending inventory + Materials required - Beginning inventory.

A budget that indicates the funds to be generated or consumed during the period is referred to as a ______________________________.

A budget that includes a 12-month planning period at all times is called a ____ budget.

Top management can reduce slack by using a bonus system to link performance to the budget.

The financial budget is prepared after the operating budget.

Budgeted production for a period is equal to

Explain why managers might want to build slack into a budget.

Which of the following represents a proper sequencing in which the budgets below are prepared?

Slack in operating budgets

Which of the following is usually perceived as being the master budget's greatest advantage to management?

A participatory budget is developed by both top management and operating personnel.

Introduction to Cost Accounting

Cost Terminology and Cost Behaviors

Predetermined Overhead Rates, Flexible Budgets, and Absorptionvariable Costing

Activity-Based Management and Activity-Based Costing

Job Order Costing

Process Costing

Standard Costing and Variance Analysis

Break-Even Point and Cost-Volume-Profit Analysis

Relevant Information for Decision Making

Allocation of Joint Costs and Accounting for By-Products

Introduction to Cost Management Systems

Responsibility Accounting,support Department Allocations,and Transfer Pricing

Performance Measurement, balanced Scorecards, and Performance Rewards

Capital Budgeting

Managing Costs and Uncertainty

Implementing Quality Concepts

Inventory and Production Management

Emerging Management Practices

Filters

	QTR 1	QTR 2	QTR 3	QTR 4
Cash balance, beginning	$16	$ e	$13	$10
Add collections from customers	a	70	67	80
Total cash available	?	?	80	90
Less disbursements:
Purchase of inventory	31	c	40	35
Operating expenses	25	22	?	15
Equipment purchases	10	14	19	0
Dividends	0	6	0	5
Total disbursements	66	?	f	55
Excess (deficiency) of cash available over disbursements	7	17	(2)	35
Financing:
Borrowings:	b	--	12	--
Repayments (including interest)	--	d	--	(12)
Total financing	?	?	12	(12)
Cash balance, ending	$10	$?	$10	$23
	====	====	====	====

Exam 8: The Master Budget

Balances for Accounts Receivable and Sales Discounts are projected after the cash collections schedule is prepared.

In a manufacturing organization,the cash budget is prepared immediately after the sales budget.

The starting point for any master budget is the _________________________.

The effect of capital expenditures on the master budget is reflected through periodic depreciation charges in the cash outflow portion.

The amount of raw materials that must be purchased can be computed by the following formula: Ending inventory + Materials required - Beginning inventory.

A budget that indicates the funds to be generated or consumed during the period is referred to as a ______________________________.

A budget that includes a 12-month planning period at all times is called a ____ budget.

Top management can reduce slack by using a bonus system to link performance to the budget.

The financial budget is prepared after the operating budget.

Budgeted production for a period is equal to

Explain why managers might want to build slack into a budget.

Which of the following represents a proper sequencing in which the budgets below are prepared?

Slack in operating budgets

Which of the following is usually perceived as being the master budget's greatest advantage to management?

A participatory budget is developed by both top management and operating personnel.

Introduction to Cost Accounting

Cost Terminology and Cost Behaviors

Predetermined Overhead Rates, Flexible Budgets, and Absorptionvariable Costing

Activity-Based Management and Activity-Based Costing

Job Order Costing

Process Costing

Standard Costing and Variance Analysis

Break-Even Point and Cost-Volume-Profit Analysis

Relevant Information for Decision Making

Allocation of Joint Costs and Accounting for By-Products

Introduction to Cost Management Systems

Responsibility Accounting,support Department Allocations,and Transfer Pricing

Performance Measurement, balanced Scorecards, and Performance Rewards

Capital Budgeting

Managing Costs and Uncertainty

Implementing Quality Concepts

Inventory and Production Management

Emerging Management Practices

Filters