Question 1

Budgets are used for planning rather than for control of operations.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following best describes the direct materials purchase budget?

Accepted Answer

A)  It is the beginning point in the budget process. 
B)  It must provide for the desired ending inventory as well as for production. 
C)  It is accompanied by a schedule of cash collections. 
D)  It is completed after the cash budget. 
A)  It is the beginning point in the budget process. 
B)  It must provide for the desired ending inventory as well as for production. 
C)  It is accompanied by a schedule of cash collections. 
D)  It is completed after the cash budget.

Question 3

Noel Enterprises has budgeted sales in units for the next five months as follows:
 
Past experience has shown that the ending inventory for each month must be equal to 10% of the next month's sales in units. The inventory on December 31 contained 400 units. The company needs to prepare a production budget for the second quarter of the year.
-What is the total number of units to be produced in February?

Accepted Answer

A)  5,220 units. 
B)  5,400 units. 
C)  5,580 units. 
D)  6,120 units. 
A)  5,220 units. 
B)  5,400 units. 
C)  5,580 units. 
D)  6,120 units.

Question 4

The following overhead data are for a department in a large company.

Required:

Prepare a report that would be useful in assessing how well costs were controlled in this department.

Accepted Answer

The answer of The following overhead data are for a...

Question 5

Noel Enterprises has budgeted sales in units for the next five months as follows:
 
Past experience has shown that the ending inventory for each month must be equal to 10% of the next month's sales in units. The inventory on December 31 contained 400 units. The company needs to prepare a production budget for the second quarter of the year.
-What is the desired ending inventory for March?

Accepted Answer

A)  380 units. 
B)  460 units. 
C)  540 units. 
D)  720 units. 
A)  380 units. 
B)  460 units. 
C)  540 units. 
D)  720 units.

Question 6

Pardise Company plans the following beginning and ending inventory levels (in units) for July:
 
Two units of raw material are needed to produce each unit of finished product.
-If 500,000 finished units were to be manufactured during July,what would be the units of raw material needed to be purchased?

Accepted Answer

A)  900,000 units. 
B)  1,000,000 units. 
C)  1,010,000 units. 
D)  1,020,000 units. 
A)  900,000 units. 
B)  1,000,000 units. 
C)  1,010,000 units. 
D)  1,020,000 units.

Question 7

Mandalay Hotel bases its budgets on guest-days. The hotel's static budget for August appears below:
 
-What is the expected total fixed overhead cost at an activity level of 5,500 guest-days per month?

Accepted Answer

A)  $139,700 
B)  $190,920 
C)  $244,200 
D)  $109,220 
A)  $139,700 
B)  $190,920 
C)  $244,200 
D)  $109,220

Question 8

Isadore Hospital bases its budgets on patient-visits. The hospital's static budget for July appears below:
 
-What is the variance for supplies costs in the flexible budget performance report for the month?

Accepted Answer

A)  $2,370 U 
B)  $2,370 F 
C)  $2,830 F 
D)  $2,830 U 
A)  $2,370 U 
B)  $2,370 F 
C)  $2,830 F 
D)  $2,830 U

Question 9

Control involves developing objectives and preparing the various budgets to achieve those objectives.

Accepted Answer

A) True 
 B)False

Question 10

The Culver Company is preparing its Manufacturing Overhead Budget for the third quarter of the year. Budgeted variable factory overhead is $3.00 per unit produced; budgeted fixed factory overhead is $75,000 per month, with $16,000 of this amount being factory depreciation.
-If the budgeted production for August is 5,000 units,what is the total budgeted factory overhead per unit?

Accepted Answer

A)  $15. 
B)  $18. 
C)  $20. 
D)  $22. 
A)  $15. 
B)  $18. 
C)  $20. 
D)  $22.

Question 11

What is a continuous (or perpetual)budget?

Accepted Answer

A)  It is prepared for a range of activity so that the budget can be adjusted for changes in activity. 
B)  It is a plan that is updated monthly or quarterly,dropping one period and adding another. 
C)  It is a strategic plan that does not change. 
D)  It is used in companies that experience no change in sales. 
A)  It is prepared for a range of activity so that the budget can be adjusted for changes in activity. 
B)  It is a plan that is updated monthly or quarterly,dropping one period and adding another. 
C)  It is a strategic plan that does not change. 
D)  It is used in companies that experience no change in sales.

Question 12

Roberts Enterprises has budgeted sales in units for the next five months as follows:
 
Past experience has shown that the ending inventory for each month must be equal to 10% of the next month's sales in units. The inventory on May 31 contained 410 units. The company needs to prepare a production budget for the second quarter of the year.
-What is the opening inventory in units for September?

Accepted Answer

A)  370 units. 
B)  530 units. 
C)  670 units. 
D)  6,700 units. 
A)  370 units. 
B)  530 units. 
C)  670 units. 
D)  6,700 units.

Question 13

Avril Company makes collections on sales according to the following schedule: 30% in the month of sale 60% in the month following sale
8% in the second month following sale The following sales are expected:
 
What should be the budgeted cash collections in March?

Accepted Answer

A)  $105,000. 
B)  $110,000. 
C)  $110,800. 
D)  $113,000. 
A)  $105,000. 
B)  $110,000. 
C)  $110,800. 
D)  $113,000.

Question 14

The following is a summarized master budget that Winnipeg Company prepared for January:

-What were the total flexible budget expenses for January?

Accepted Answer

A)  $383,750. 
B)  $371,000. 
C)  $387,000. 
D)  $365,500. 
A)  $383,750. 
B)  $371,000. 
C)  $387,000. 
D)  $365,500.

Question 15

A static budget is geared toward a single level of activity.

Accepted Answer

A) True 
 B)False

Question 16

Pardee Company plans to sell 12,000 units during the month of August.If the company has 2,500 units on hand at the start of the month,and plans to have 2,000 units on hand at the end of the month,how many units must be produced during the month?

Accepted Answer

A)  11,500 units. 
B)  12,000 units. 
C)  12,500 units. 
D)  14,000 units. 
A)  11,500 units. 
B)  12,000 units. 
C)  12,500 units. 
D)  14,000 units.

Question 17

The Bandeiras Company, a merchandising firm, has budgeted its activity for December according to the following information:

I. Sales at $550,000, all for cash.
II. Merchandise inventory on November 30 was $300,000.
III. Budgeted depreciation for December is $35,000.
IV. The cash balance at December 1 was $25,000.
V. Selling and administrative expenses are budgeted at $60,000 for December and are paid in cash.
VI. The planned merchandise inventory on December 31 is $270,000.
VII. The invoice cost for merchandise purchases represents 75% of the sales price. All purchases are paid for in cash.

-What is the budgeted net income for December?

Accepted Answer

A)  $42,500. 
B)  $77,500. 
C)  $107,500. 
D)  $137,500. 
A)  $42,500. 
B)  $77,500. 
C)  $107,500. 
D)  $137,500.

Question 18

Marple Company's budgeted production in units and budgeted raw materials purchases over the next three months are given below:
 
 Two kilograms of raw materials are required to produce one unit of product.The company wants raw materials on hand at the end of each month equal to 30% of the following month's production needs.The company is expected to have 36,000 kilograms of raw materials on hand on January 1.What should be the budgeted production for February?

Accepted Answer

A)  75,000 units. 
B)  82,500 units. 
C)  105,000 units. 
D)  150,000 units. 
A)  75,000 units. 
B)  82,500 units. 
C)  105,000 units. 
D)  150,000 units.

Question 19

Superior Industries' sales budget shows quarterly sales for the next year as follows: 
 
Company policy is to have a finished goods inventory at the end of each quarter equal to 20% of the next quarter's sales.What should be the budgeted production for the second quarter?

Accepted Answer

A)  7,200 units. 
B)  8,000 units. 
C)  8,400 units. 
D)  8,800 units. 
A)  7,200 units. 
B)  8,000 units. 
C)  8,400 units. 
D)  8,800 units.

Question 20

The following overhead data are for a department in a large company.

Required:

Prepare a report that would be useful in assessing how well costs were controlled in this department.

Accepted Answer

The answer of The following overhead data are for a...

Budgets are used for planning rather than for control of operations.

Which of the following best describes the direct materials purchase budget?

The following overhead data are for a department in a large company. Required: Prepare a report that would be useful in assessing how well costs were controlled in this department.

Pardise Company plans the following beginning and ending inventory levels (in units) for July: Two units of raw material are needed to produce each unit of finished product. -If 500,000 finished units were to be manufactured during July,what would be the units of raw material needed to be purchased?

Mandalay Hotel bases its budgets on guest-days. The hotel's static budget for August appears below: -What is the expected total fixed overhead cost at an activity level of 5,500 guest-days per month?

Isadore Hospital bases its budgets on patient-visits. The hospital's static budget for July appears below: -What is the variance for supplies costs in the flexible budget performance report for the month?

Control involves developing objectives and preparing the various budgets to achieve those objectives.

What is a continuous (or perpetual)budget?

Avril Company makes collections on sales according to the following schedule: 30% in the month of sale 60% in the month following sale 8% in the second month following sale The following sales are expected: What should be the budgeted cash collections in March?

The following is a summarized master budget that Winnipeg Company prepared for January: -What were the total flexible budget expenses for January?

A static budget is geared toward a single level of activity.

Pardee Company plans to sell 12,000 units during the month of August.If the company has 2,500 units on hand at the start of the month,and plans to have 2,000 units on hand at the end of the month,how many units must be produced during the month?

Superior Industries' sales budget shows quarterly sales for the next year as follows: Company policy is to have a finished goods inventory at the end of each quarter equal to 20% of the next quarter's sales.What should be the budgeted production for the second quarter?

The following overhead data are for a department in a large company. Required: Prepare a report that would be useful in assessing how well costs were controlled in this department.

Managerial Accounting and the Business Environment

Cost Terms, Concepts, and Classifications

Systems Design: Job-Order Costing

Systems Design: Process Costing

Activity-Based Costing: A Tool to Aid Decision Making

Cost Behaviour: Analysis and Use

Cost-Volume-Profit Relationships

Variable Costing: A Tool for Management

Standard Costs and Overhead Analysis

Reporting for Control

Relevant Costs for Decision Making

Capital Budgeting Decisions

Financial Statement Analysis

Filters

Exam 9: Budgeting

Budgets are used for planning rather than for control of operations.

Which of the following best describes the direct materials purchase budget?

The following overhead data are for a department in a large company. Required: Prepare a report that would be useful in assessing how well costs were controlled in this department.

Mandalay Hotel bases its budgets on guest-days. The hotel's static budget for August appears below: -What is the expected total fixed overhead cost at an activity level of 5,500 guest-days per month?

Isadore Hospital bases its budgets on patient-visits. The hospital's static budget for July appears below: -What is the variance for supplies costs in the flexible budget performance report for the month?

Control involves developing objectives and preparing the various budgets to achieve those objectives.

What is a continuous (or perpetual)budget?

Avril Company makes collections on sales according to the following schedule: 30% in the month of sale 60% in the month following sale 8% in the second month following sale The following sales are expected: What should be the budgeted cash collections in March?

The following is a summarized master budget that Winnipeg Company prepared for January: -What were the total flexible budget expenses for January?

A static budget is geared toward a single level of activity.

Pardee Company plans to sell 12,000 units during the month of August.If the company has 2,500 units on hand at the start of the month,and plans to have 2,000 units on hand at the end of the month,how many units must be produced during the month?

Superior Industries' sales budget shows quarterly sales for the next year as follows: Company policy is to have a finished goods inventory at the end of each quarter equal to 20% of the next quarter's sales.What should be the budgeted production for the second quarter?

The following overhead data are for a department in a large company. Required: Prepare a report that would be useful in assessing how well costs were controlled in this department.

Managerial Accounting and the Business Environment

Cost Terms, Concepts, and Classifications

Systems Design: Job-Order Costing

Systems Design: Process Costing

Activity-Based Costing: A Tool to Aid Decision Making

Cost Behaviour: Analysis and Use

Cost-Volume-Profit Relationships

Variable Costing: A Tool for Management

Standard Costs and Overhead Analysis

Reporting for Control

Relevant Costs for Decision Making

Capital Budgeting Decisions

Financial Statement Analysis

Filters