Question 1

Which of the following choices correctly denotes managerial functions that are commonly associated with budgeting?

Accepted Answer

A) Estimating taxes payable. 
B) Planning, Performance Evaluation, and Coordination of Activities 
C) Planning only 
D) Planning and Coordination of Activities 
E) Performance Evaluation only. 
A) Estimating taxes payable. 
B) Planning, Performance Evaluation, and Coordination of Activities 
C) Planning only 
D) Planning and Coordination of Activities 
E) Performance Evaluation only.

Question 2

The following information relates to DFW Corporation for the year ended March 31, 2012:
▪ All sales are on account and are budgeted as follows: February, $350,000; March, $360,000; and April, $400,000. DFW collects 70% of its sales in the month of sale and 30% in the following month.
▪ Cost of goods sold averages 60% of sales. Purchases total 65% of the following month's sales and are paid in the month following acquisition.
▪ Cash operating expenses total $60,000 per month and are paid when incurred. Monthly depreciation amounts to $18,000.
▪ Selected amounts taken from the January 31 balance sheet were: accounts receivable, $115,000; plant and equipment (net), $107,000; and retained earnings, $85,000.
Required:
A. Prepare a budgeted income statement that summarizes activity for the two months ended March 31, 2012.
B. Compute the amounts that would appear on the March 31 balance sheet for accounts receivable, plant and equipment (net), and retained earnings.

Accepted Answer

None

Question 3

James Corporation, headquartered in Toronto, has a manufacturing plant in Edmonton. Plant managers desire to participate in the company's budget efforts, which, for the past 10 years, have been handled solely by top executives in Toronto. Edmonton managers feel that by becoming involved, they can make great strides in terms of improving operating performance of their aging facility.
Required:
Briefly discuss this situation, focusing on the benefits and problems of letting Edmonton managers participate in the company's budgetary efforts.

Accepted Answer

Participative budgets will make the plan

Question 4

The budgeted income statement, budgeted balance sheet, and budgeted statement of cash flows comprise:

Accepted Answer

A) the final portion of the master budget. 
B) the depiction of an organization's overall actual financial results. 
C) the first step of the master budget. 
D) the portion of the master budget prepared after the sales forecast and before the remainder of the operational budgets. 
E) the second step of the master budget. 
A) the final portion of the master budget. 
B) the depiction of an organization's overall actual financial results. 
C) the first step of the master budget. 
D) the portion of the master budget prepared after the sales forecast and before the remainder of the operational budgets. 
E) the second step of the master budget.

Question 5

Which of the following would be considered when preparing a company's sales forecast?

Accepted Answer

A) Anticipated advertising campaigns, and general economic trends. 
B) Anticipated advertising campaigns, and expected competitive actions. 
C) Anticipated advertising campaigns. 
D) Anticipated advertising campaigns, general economic trends, and expected competitive actions. 
E) Expected competitive actions. 
A) Anticipated advertising campaigns, and general economic trends. 
B) Anticipated advertising campaigns, and expected competitive actions. 
C) Anticipated advertising campaigns. 
D) Anticipated advertising campaigns, general economic trends, and expected competitive actions. 
E) Expected competitive actions.

Question 6

The comprehensive set of budgets that serves as a company's overall financial plan is commonly known as:

Accepted Answer

A) an integrated budget. 
B) a pro-forma budget. 
C) a master budget. 
D) a financial budget. 
E) a rolling budget. 
A) an integrated budget. 
B) a pro-forma budget. 
C) a master budget. 
D) a financial budget. 
E) a rolling budget.

Question 7

North Line Company manufactures a product requiring 0.5 ounces of platinum per unit. The cost of platinum is approximately $360 per ounce; the company maintains an ending platinum inventory equal to 10% of the following month's production usage. The following data were taken from the most recent quarterly production budget: $\begin{array} { | l | c | c | c | } 
\hline & \text { July } & \text { August } & \text { September } \
\hline \text { Planned production in units } & 1,000 & 1,100 & 980 \
\hline
\end{array}$ If it takes two direct labour hours to produce each unit and North Line's cost per labour hour is $15, direct labour cost for August would be budgeted at:

Accepted Answer

A) $16,500. 
B) $30,000. 
C) $31,200. 
D) $33,000. 
E) $34,800. 
A) $16,500. 
B) $30,000. 
C) $31,200. 
D) $33,000. 
E) $34,800.

Question 8

Which of the following outcomes is sometimes associated with participative budgeting?

Accepted Answer

A) Employees make little effort to achieve budgetary goals. 
B) Budget preparation time is never lengthy. 
C) The problem of budget padding can never arise. 
D) Financial modeling becomes much more difficult to undertake. 
E) Budget preparation time can be somewhat lengthy and budget padding may arise. 
A) Employees make little effort to achieve budgetary goals. 
B) Budget preparation time is never lengthy. 
C) The problem of budget padding can never arise. 
D) Financial modeling becomes much more difficult to undertake. 
E) Budget preparation time can be somewhat lengthy and budget padding may arise.

Question 9

End-of-period figures for accounts receivable and payables to suppliers would be found on the:

Accepted Answer

A) cash budget. 
B) budgeted schedule of cost of goods manufactured. 
C) budgeted income statement. 
D) budgeted balance sheet. 
E) budgeted statement of cash flows. 
A) cash budget. 
B) budgeted schedule of cost of goods manufactured. 
C) budgeted income statement. 
D) budgeted balance sheet. 
E) budgeted statement of cash flows.

Question 10

The master budget contains the following components, among others: direct-material budget, budgeted balance sheet, production budget, and cash budget. Which of these components would be prepared first and which would be prepared last?

Accepted Answer

A) Direct-material budget, cash budget 
B) Direct-material budget, balance sheet 
C) Production budget, cash budget 
D) Production budget, balance sheet 
E) Cash budget, direct-material budget 
A) Direct-material budget, cash budget 
B) Direct-material budget, balance sheet 
C) Production budget, cash budget 
D) Production budget, balance sheet 
E) Cash budget, direct-material budget

Which of the following choices correctly denotes managerial functions that are commonly associated with budgeting?

The budgeted income statement, budgeted balance sheet, and budgeted statement of cash flows comprise:

Which of the following would be considered when preparing a company's sales forecast?

The comprehensive set of budgets that serves as a company's overall financial plan is commonly known as:

Which of the following outcomes is sometimes associated with participative budgeting?

End-of-period figures for accounts receivable and payables to suppliers would be found on the:

The master budget contains the following components, among others: direct-material budget, budgeted balance sheet, production budget, and cash budget. Which of these components would be prepared first and which would be prepared last?

The Changing Role of Managerial Accounting

Basic Cost Management Concepts

Product Costing and Cost Accumulation

Process Costing and Hybrid Product-Costing Systems

Activity-Based Costing and Management

Activity Analysis, Cost Behaviour, and Cost Estimation

Cost-Volume-Profit Analysis, Absorption and Variable Costing

Standard Costing and Flexible Budgeting

Cost Management Tools

Responsibility Accounting, Investment Centres, and Transfer Pricing

Decision Making: Relevant Costs and Benefits

Target Costing and Cost Analysis for Pricing Decisions

Capital Expenditure Decisions

Allocation of Support Activity Costs and Joint Costs

Filters

Exam 8: Profit Planning and Activity-Based Budgeting

Which of the following choices correctly denotes managerial functions that are commonly associated with budgeting?

The budgeted income statement, budgeted balance sheet, and budgeted statement of cash flows comprise:

Which of the following would be considered when preparing a company's sales forecast?

The comprehensive set of budgets that serves as a company's overall financial plan is commonly known as:

Which of the following outcomes is sometimes associated with participative budgeting?

End-of-period figures for accounts receivable and payables to suppliers would be found on the:

The master budget contains the following components, among others: direct-material budget, budgeted balance sheet, production budget, and cash budget. Which of these components would be prepared first and which would be prepared last?

The Changing Role of Managerial Accounting

Basic Cost Management Concepts

Product Costing and Cost Accumulation

Process Costing and Hybrid Product-Costing Systems

Activity-Based Costing and Management

Activity Analysis, Cost Behaviour, and Cost Estimation

Cost-Volume-Profit Analysis, Absorption and Variable Costing

Standard Costing and Flexible Budgeting

Cost Management Tools

Responsibility Accounting, Investment Centres, and Transfer Pricing

Decision Making: Relevant Costs and Benefits

Target Costing and Cost Analysis for Pricing Decisions

Capital Expenditure Decisions

Allocation of Support Activity Costs and Joint Costs

Filters