Exam 12: Master Budget and Responsibility Accounting

Mountain Express,a clothing boutique chain has an operating income of $240,000.The sales revenue of the company was calculated to be $960,000. Required Compute the operating profit margin.

What are some things that managers focus on as they prepare budgets?

After a manager determines the sales budget,a management accountant prepares a ________ that serves as an input for the preparation of the cash budget.

Pressure from performance embedded in stretch targets permit employees to engage in illegal and unethical practices when working in other countries.

How do managers treat fixed overhead costs in the budget process?

Some companies refer to budgeting as targeting and other companies refer to budgets as profit plans.

Which of the following is not true about budgeting in multinational companies?

Microsoft refers to goals as ________ and distributes firm-level goals across the company,connecting them to organizational,team,and individual commitments.

A manager that works at a company that is evaluated as a profit center will more likely consider rush orders important because they impact sales.

What is the impact of budgeting on employee performance?

To avoid problems of budgetary slack,some companies use budgets primarily to plan and other companies use it to a lesser extent in performance evaluations.

How do managers react to budgets that challenge the manager?

The most frequent budget period is one year.

Budgets enable a company's managers to measure actual performance against predicted performance.

What is the concept of the bottom-up perspective of budgeting?

What is a bill of materials? Why do managers use it?

What should managers do if they use sensitivity analysis and they detect small declines in operating income? What could happen if direct material prices increase by 6% and the selling prices decline in the next year?

Which of the following is not true about ERP systems?

Estimates suggest that senior managers spend about ________ of their time on budgeting;and,finance planning departments spend as much as ________ on budgeting.

The beginning cash balance minus cash receipts equal the total cash available for needs before any financing.