Question 1

An example of a recurring short-term plan is

Accepted Answer

A) a probable product line change. 
B) expansion of plant and facilities. 
C) a unit sales forecast. 
D) a change in marketing strategies. 
A) a probable product line change. 
B) expansion of plant and facilities. 
C) a unit sales forecast. 
D) a change in marketing strategies.

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

The budget that focuses on an organization's long-term needs is referred to as a(n)______________________________.

Accepted Answer

The answer of The budget that focuses on an organization's...

Question 4

An annual budget is an example of a strategic plan.

Accepted Answer

A) True 
 B)False

Question 5

Clooney 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,Clooney Company has the following accounts receivable balances:
From Apil sales              $21,00000
From May sales              48,000
Clooney's expected sales for June are $150,000.How much cash will Clooney Company expect to collect in June?

Accepted Answer

A) $127,400 
B) $129,000 
C) $148,600 
D) $152,520 
A) $127,400 
B) $129,000 
C) $148,600 
D) $152,520

Question 6

What role does the budgeting activity play in managerial compensation and performance evaluation?

Accepted Answer

Once set,the budget is not only a plan f

Question 7

For the month of November,Whetzel Corporation.predicts total cash collections to be $1 million.Also for November,Whetzel Corporation.estimates that its beginning cash balance will be $50,000 and that it will borrow cash in the amount of $70,000.If Whetzel Corporation.estimates an ending cash balance of $30,000 for November,what must its projected cash disbursements be?

Accepted Answer

A) $1,090,000 
B) $1,120,000 
C) $1,070,000 
D) $1,020,000 
A) $1,090,000 
B) $1,120,000 
C) $1,070,000 
D) $1,020,000

Question 8

List and describe the pro-forma financial statements that are prepared at the end of the budgeting process.

Accepted Answer

Cost of Goods Manufactured Schedule--pro

Question 9

Santa Fe Music,Inc.
Santa Fe Music,Inc.sells electronic keyboards.The following information regarding operating costs has been extracted from budgets of Santa Fe Music for December of this year and the first few months of next year:
                    Dec.       Jan.       Feb.       Mar.               Payroll       $12,000       $13,000       $22,000       $16,000              Insurance        4,000       4,000       4,000       4,000               Rent       6,000       6,000       6,000       6,000               Depreciation       2,000       2,000       2,000       2,000              Taxes        1,200       1,000       2,300       2,000      In addition to the above operating costs,enough keyboards are purchased each month to maintain the inventory at 40 percent of the projected next month's sales.The firm is expected to be in compliance with this policy on December 1.Budgeted sales are:
                     Dec.       Jan.       Feb.       Mar.       Apr.              Budgeted sales in units:        40       45       60       50       40       
Refer to Santa Fe Music,Inc.The average cost of a keyboard is $500.Merchandise is paid for in the month following its purchase.All other expenses are paid in the month in which they are incurred.
Prepare a purchases budget for December through March;then prepare a cash disbursements budget for Santa Fe Music,Inc.for the first three months of next year.

Accepted Answer

In addition to the above operating costs

Question 10

A budget is

Accepted Answer

A) a planning tool. 
B) a control tool. 
C) a means of communicating goals to the firm's divisions. 
D) all of the above. 
A) a planning tool. 
B) a control tool. 
C) a means of communicating goals to the firm's divisions. 
D) all of the above.

Question 11

The master budget is a static budget because it

Accepted Answer

A) is geared to only one level of production and sales. 
B) never changes from one year to the next. 
C) covers a preset period of time. 
D) always contains the same operating and financial budgets. 
A) is geared to only one level of production and sales. 
B) never changes from one year to the next. 
C) covers a preset period of time. 
D) always contains the same operating and financial budgets.

Question 12

Depreciation on the production equipment would appear in which of the following budgets?

Accepted Answer

A) cash budget 
B) production budget 
C) selling and administrative expense budget 
D) manufacturing overhead budget 
A) cash budget 
B) production budget 
C) selling and administrative expense budget 
D) manufacturing overhead budget

Question 13

Matthews Company has a policy of maintaining an inventory of finished goods equal to 30 percent of the following month's sales.For the forthcoming month of March,Matthews has budgeted the beginning inventory at 30,000 units and the ending inventory at 33,000 units.This suggests that

Accepted Answer

A) February sales are budgeted at 10,000 units less than March sales. 
B) March sales are budgeted at 10,000 units less than April sales. 
C) February sales are budgeted at 3,000 units less than March sales. 
D) March sales are budgeted at 3,000 units less than April sales. 
A) February sales are budgeted at 10,000 units less than March sales. 
B) March sales are budgeted at 10,000 units less than April sales. 
C) February sales are budgeted at 3,000 units less than March sales. 
D) March sales are budgeted at 3,000 units less than April sales.

Question 14

Which of the following items would not be found in the financing section of the cash budget?

Accepted Answer

A) cash payments for debt retirement 
B) cash payments for interest 
C) cash payments for sales of investments 
D) payment of accounts payable 
A) cash payments for debt retirement 
B) cash payments for interest 
C) cash payments for sales of investments 
D) payment of accounts payable

Question 15

Budgeted sales for Fleetwood Corporation for the first quarter the year are shown below:

$\text {\underline{ JANUARY} }$            $\text {\underline{ FEBRUARY} }$                $\text {\underline{ MARCH} }$

UNITS:                            35,000                            25,000                                    32,000
The company has a policy that requires the ending inventory in each period to be 10 percent of the following period's sales.Assuming that the company follows this policy,what quantity of production should be scheduled for February?

Accepted Answer

A) 24,300 units 
B) 24,700 units 
C) 25,000 units 
D) 25,700 units 
A) 24,300 units 
B) 24,700 units 
C) 25,000 units 
D) 25,700 units

Question 16

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 C,what are the budgeted cash collections?

Accepted Answer

A) $200 
B) $300 
C) $400 
D) $500 
A) $200 
B) $300 
C) $400 
D) $500

Question 17

Strategic planning is focused on short-term goals of less than five years.

Accepted Answer

A) True 
 B)False

Question 18

The primary reason that managers impose a minimum cash balance in the cash budget is

Accepted Answer

A) because management needs discretionary cash for unforeseen business opportunities. 
B) managers lack discipline to control their spending. 
C) that it protects the organization from the uncertainty of the budgeting process. 
D) that it makes the financial statements look more appealing to creditors. 
A) because management needs discretionary cash for unforeseen business opportunities. 
B) managers lack discipline to control their spending. 
C) that it protects the organization from the uncertainty of the budgeting process. 
D) that it makes the financial statements look more appealing to creditors.

Question 19

What are some of the benefits of a well-prepared budget?

Accepted Answer

1.The budget help managers align activit

Question 20

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 borrowing required during the first quarter to meet the minimum cash balance (item b)is:

Accepted Answer

A) $0 
B) $7 
C) $10 
D) $ 3 
A) $0 
B) $7 
C) $10 
D) $ 3

An example of a recurring short-term plan is

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

The budget that focuses on an organization's long-term needs is referred to as a(n)______________________________.

An annual budget is an example of a strategic plan.

What role does the budgeting activity play in managerial compensation and performance evaluation?

List and describe the pro-forma financial statements that are prepared at the end of the budgeting process.

A budget is

The master budget is a static budget because it

Depreciation on the production equipment would appear in which of the following budgets?

Matthews Company has a policy of maintaining an inventory of finished goods equal to 30 percent of the following month's sales.For the forthcoming month of March,Matthews has budgeted the beginning inventory at 30,000 units and the ending inventory at 33,000 units.This suggests that

Which of the following items would not be found in the financing section of the cash budget?

Strategic planning is focused on short-term goals of less than five years.

The primary reason that managers impose a minimum cash balance in the cash budget is

What are some of the benefits of a well-prepared 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

	Dec.	Jan.	Feb.	Mar.
Payroll	$12,000	$13,000	$22,000	$16,000
Insurance	4,000	4,000	4,000	4,000
Rent	6,000	6,000	6,000	6,000
Depreciation	2,000	2,000	2,000	2,000
Taxes	1,200	1,000	2,300	2,000

	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

An example of a recurring short-term plan is

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

The budget that focuses on an organization's long-term needs is referred to as a(n)______________________________.

An annual budget is an example of a strategic plan.

What role does the budgeting activity play in managerial compensation and performance evaluation?

List and describe the pro-forma financial statements that are prepared at the end of the budgeting process.

A budget is

The master budget is a static budget because it

Depreciation on the production equipment would appear in which of the following budgets?

Matthews Company has a policy of maintaining an inventory of finished goods equal to 30 percent of the following month's sales.For the forthcoming month of March,Matthews has budgeted the beginning inventory at 30,000 units and the ending inventory at 33,000 units.This suggests that

Which of the following items would not be found in the financing section of the cash budget?

Strategic planning is focused on short-term goals of less than five years.

The primary reason that managers impose a minimum cash balance in the cash budget is

What are some of the benefits of a well-prepared 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