Question 1

Chronologically,the first part of the master budget to be prepared would be the

Accepted Answer

A) sales budget. 
B) production budget. 
C) cash budget. 
D) pro forma financial statements. 
A) sales budget. 
B) production budget. 
C) cash budget. 
D) pro forma financial statements.

Question 2

Shannon Companies
                    CASH BUDGET                      Company A       Company B       Company C               Beginning cash balance       $100       $300       $700              Cash collections        ?       400       ?               Cash disbursements       500       ?       600              Cash excess (shortage)        ?       ?       400              Borrowing (repayments)        300       100       ?              Ending cash       200        200       100      
Refer to Shannon Companies.For Company A,what are the budgeted cash collections?

Accepted Answer

A) $700 
B) $500 
C) $300 
D) $400 
A) $700 
B) $500 
C) $300 
D) $400

Question 3

Lindburgh Company
Lindburgh Company manufactures toy airplanes.Information on Lindburgh Company's labor costs follow:
$\begin{array}{ll}
\text { Sales commissions } & \$ 5 \text { per plane } \
\text { Administration } & \$ 10,000 \text { per month } \
\text { Indirect factory labor } & \$ 3 \text { per plane } \
\text { Direct factory labor } & \$ 5 \text { per plane }
\end{array}$

The following information applies to the upcoming month of July for Lindburgh Company:
Budgeted production                      1,200 unit
Budget sales                                    1,000 unit:

Refer to Lindburgh Company.What amount of budgeted labor cost would appear in the July selling,general,and administrative expense budget?

Accepted Answer

A) $10,000 
B) $16,000 
C) $15,000 
D) $23,000 
A) $10,000 
B) $16,000 
C) $15,000 
D) $23,000

Question 4

Key variables that are identified in strategic planning are

Accepted Answer

A) normally controllable if they are internal. 
B) seldom if ever controllable. 
C) normally controllable if they occur in a domestic market. 
D) normally uncontrollable if they are internal. 
A) normally controllable if they are internal. 
B) seldom if ever controllable. 
C) normally controllable if they occur in a domestic market. 
D) normally uncontrollable if they are internal.

Question 5

The budgeted payment for labor cost each period would be found in the

Accepted Answer

A) labor budget. 
B) pro forma income statement. 
C) selling,general,and administrative expense budget. 
D) cash budget. 
A) labor budget. 
B) pro forma income statement. 
C) selling,general,and administrative expense budget. 
D) cash budget.

Question 6

Priceless Memories Company
Priceless Memories Company manufactures toy trains.Information on Priceless Memories Company's labor costs follow:
$\begin{array}{ll}
\text { Sales commissions } & \$ 6 \text { per train } \
\text { Administration } & \$ 12,000 \text { per month } \
\text { Indirect factory labor } & \$ 4 \text { per train } \
\text { Direct factorylabor } & \$ 6 \text { per train }
\end{array}$

The following information applies to the upcoming month of July for Priceless Memories Company:
Budgeted production                   1,500 unit:
Budgeted sales                              1,300 unit:

Refer to Priceless Memories Company.What amount of budgeted labor cost would appear in the July selling,general,and administrative expense budget?

Accepted Answer

A) $12,000 
B) $21,000 
C) $19,800 
D) $32,800 
A) $12,000 
B) $21,000 
C) $19,800 
D) $32,800

Question 7

Strategic planning is

Accepted Answer

A) planning activities for promoting products for the future. 
B) planning for appropriate assignments of resources. 
C) setting standards for the use of important but hard-to-find materials. 
D) stating and establishing long-term plans. 
A) planning activities for promoting products for the future. 
B) planning for appropriate assignments of resources. 
C) setting standards for the use of important but hard-to-find materials. 
D) stating and establishing long-term plans.

Question 8

Which of the following items should not be included in a company's budget manual?

Accepted Answer

A) sample budgetary forms 
B) a statement of desired results of the budget 
C) a listing of budgetary activities to be performed 
D) financial statements for the upcoming fiscal year 
A) sample budgetary forms 
B) a statement of desired results of the budget 
C) a listing of budgetary activities to be performed 
D) financial statements for the upcoming fiscal year

Question 9

In a manufacturing organization,the budgets that are prepared after the production budget are the ______________________________,_________________________,and ____________________ budgets.

Accepted Answer

direct mat

Question 10

The following are forecasts of sales and purchases for Savannah Company:
                    Sales      Purchases                April       $80,000       $30,000              May        90,000       40,000               June       85,000       30,000      
All sales are on credit.Records show that 70 percent of the customers pay the month of the sale,20 percent pay the month after the sale,and the remaining 10 percent pay the second month after the sale.Purchases are all paid the following month at a 2 percent discount.Cash disbursements for operating expenses in June were $5,000.
Required: Prepare a schedule of cash receipts and disbursements for June.
Schedules of Cash Receipts and Disbursements for June

Accepted Answer

All sales are on credit.Records show tha

Question 11

Emerald Company has the following expected pattern of collections on credit sales: 70 percent collected in the month of sale,15 percent in the month after the month of sale,and 14 percent in the second month after the month of sale.The remaining 1 percent is never collected.At the end of May,Emerald Company has the following accounts receivable balances:
From April sales                                  $ \$ 21,000 $
From May sales                                    48,000
Emerald's expected sales for June are $150,000.What were total sales for April?

Accepted Answer

A) $150,000 
B) $72,414 
C) $70,000 
D) $140,000 
A) $150,000 
B) $72,414 
C) $70,000 
D) $140,000

Question 12

The first stage in the budgeting process is the preparation of a sales budget.

Accepted Answer

A) True 
 B)False

Question 13

A budget that is expressed in terms of both units and dollars is referred to a(n)______________________________.

Accepted Answer

The answer of A budget that is expressed in terms...

Question 14

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 total disbursements during the third quarter (item f)is:

Accepted Answer

A) $84 
B) $78 
C) $82 
D) $59 
A) $84 
B) $78 
C) $82 
D) $59

Question 15

The method of budgeting that adds one month's budget to the end of the plan when the current month's budget is dropped from the plan is called ____ budgeting.

Accepted Answer

A) long-term 
B) operations 
C) incremental 
D) continuous 
A) long-term 
B) operations 
C) incremental 
D) continuous

Question 16

Whitney Corporation
Whitney Corporation,a reseller of women's fashions,has budgeted its activity for March.The budget information is presented below:
I. Sales are $ \$ 550,000 $. All sales are cash
II. Merchandise invent ory on February 28 is $ \$ 300,000 $
III. Budgeted depreciation for March is $ \$ 35,000 $.
IV. Cash in bank on March 1 is $ \$ 25,000 $.
V. Selling and administrative expenses are budgeted at $ \$ 60,000 $ for March and are paid in cash
VI. The planned merchandise inventory on March 31 is $ \$ 270,000 $.
VII. $\text { The invoice cost for merchandise purchases represents } 75 \% \text { of sales price. All purchases are paid for in cas1 }$

Refer to Whitney Corporation.The budgeted cash disbursements for March are:

Accepted Answer

A) $382,500 
B) $442,500 
C) $472,500 
D) $477,500 
A) $382,500 
B) $442,500 
C) $472,500 
D) $477,500

Question 17

The final step in constructing the master budget is the preparation of pro-forma financial statements for the period.

Accepted Answer

A) True 
 B)False

Question 18

Ineffective budgets and/or control systems are characterized by the use of

Accepted Answer

A) budgets as a planning tool only and disregarding them for control purposes. 
B) budgets for motivation. 
C) budgets for coordination. 
D) the budget for communication. 
A) budgets as a planning tool only and disregarding them for control purposes. 
B) budgets for motivation. 
C) budgets for coordination. 
D) the budget for communication.

Question 19

A disadvantage of participatory budgets is that

Accepted Answer

A) there is a high degree of acceptance of the goals and objectives by operating management. 
B) they are usually more realistic. 
C) they lead to better morale and higher motivation. 
D) they usually require more time to prepare. 
A) there is a high degree of acceptance of the goals and objectives by operating management. 
B) they are usually more realistic. 
C) they lead to better morale and higher motivation. 
D) they usually require more time to prepare.

Question 20

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

Accepted Answer

A) True 
 B)False

Chronologically,the first part of the master budget to be prepared would be the

Key variables that are identified in strategic planning are

The budgeted payment for labor cost each period would be found in the

Strategic planning is

Which of the following items should not be included in a company's budget manual?

In a manufacturing organization,the budgets that are prepared after the production budget are the __________________,_,and ________ budgets.

The first stage in the budgeting process is the preparation of a sales budget.

A budget that is expressed in terms of both units and dollars is referred to a(n)______________________________.

The method of budgeting that adds one month's budget to the end of the plan when the current month's budget is dropped from the plan is called ____ budgeting.

The final step in constructing the master budget is the preparation of pro-forma financial statements for the period.

Ineffective budgets and/or control systems are characterized by the use of

A disadvantage of participatory budgets is that

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

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

	CASH BUDGET
	Company A	Company B	Company C
Beginning cash balance	$100	$300	$700
Cash collections	?	400	?
Cash disbursements	500	?	600
Cash excess (shortage)	?	?	400
Borrowing (repayments)	300	100	?
Ending cash	200	200	100

	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

Chronologically,the first part of the master budget to be prepared would be the

Key variables that are identified in strategic planning are

The budgeted payment for labor cost each period would be found in the

Strategic planning is

Which of the following items should not be included in a company's budget manual?

In a manufacturing organization,the budgets that are prepared after the production budget are the ______________________________,_________________________,and ____________________ budgets.

The first stage in the budgeting process is the preparation of a sales budget.

A budget that is expressed in terms of both units and dollars is referred to a(n)______________________________.

The method of budgeting that adds one month's budget to the end of the plan when the current month's budget is dropped from the plan is called ____ budgeting.

The final step in constructing the master budget is the preparation of pro-forma financial statements for the period.

Ineffective budgets and/or control systems are characterized by the use of

A disadvantage of participatory budgets is that

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

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

In a manufacturing organization,the budgets that are prepared after the production budget are the __________________,_,and ________ budgets.