Question 1

Which of the following is a potential disadvantage of participative budgeting?

Accepted Answer

A) Managers are more likely to be motivated by budgets they help create. 
B) Managers may build slack into the budget. 
C) Managers should acquire knowledge to create realistic budgets. 
D) None of the above are true. 
A) Managers are more likely to be motivated by budgets they help create. 
B) Managers may build slack into the budget. 
C) Managers should acquire knowledge to create realistic budgets. 
D) None of the above are true.

Question 2

In preparing the operating budget, the first step is preparing the

Accepted Answer

A) cash budget. 
B) sales budget. 
C) budgeted income statement. 
D) purchases budget. 
A) cash budget. 
B) sales budget. 
C) budgeted income statement. 
D) purchases budget.

Question 3

The manager at a merchandising company does not prepare a direct materials budget.

Accepted Answer

A) True 
 B)False

Question 4

Whistle Works manufacturers safety whistle keychains. They have the following information available to prepare their master budget:   Whistle Works sells each whistle for $12. It's been determined that each unit costs $7.25 to manufacture. How much is total budgeted operating expenses for the year ended 2016?

Accepted Answer

A) $61,875 
B) $475,000 
C) $506,500 
D) $505,375 
A) $61,875 
B) $475,000 
C) $506,500 
D) $505,375

Question 5

Budget committee is a what-if technique that asks what a result will be if a predicted amount is not achieved or if an underlying assumption changes.

Accepted Answer

A) True 
 B)False

Question 6

Whistle Works manufacturers safety whistle keychains. They have the following information available to prepare their master budget:   Whistle Works sells each whistle for $12. How many units does Whistle Works thinks it will sell in December?

Accepted Answer

A) 604,800 units 
B) 11,450 units 
C) 4,200 units 
D) 3,750 units 
A) 604,800 units 
B) 11,450 units 
C) 4,200 units 
D) 3,750 units

Question 7

The ________ budget begins with the number of units to be sold.

Accepted Answer

A) manufacturing overhead 
B) direct materials 
C) sales 
D) capital expenditures 
A) manufacturing overhead 
B) direct materials 
C) sales 
D) capital expenditures

Question 8

Strategic planning involves setting short-term goals that extend three to four months into the future.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following types of cash outlays contains its own budget?

Accepted Answer

A) Capital expenditures 
B) Dividends 
C) Income taxes 
D) All of the above 
A) Capital expenditures 
B) Dividends 
C) Income taxes 
D) All of the above

Question 10

The format of the "cost of goods sold, inventory, and purchases" budget is as follows:

Accepted Answer

A) desired ending inventory + beginning inventory - cost of goods sold. 
B) cost of goods sold + desired ending inventory - beginning inventory. 
C) cost of goods sold - desired ending inventory + beginning inventory. 
D) desired ending inventory - beginning inventory - cost of goods sold. 
A) desired ending inventory + beginning inventory - cost of goods sold. 
B) cost of goods sold + desired ending inventory - beginning inventory. 
C) cost of goods sold - desired ending inventory + beginning inventory. 
D) desired ending inventory - beginning inventory - cost of goods sold.

Question 11

Piatt Company expects cash sales for July of $16,000, and a 23% monthly increase during August and September. Credit sales of $1400 in July should be followed by 29% increases during August and September. What are budgeted cash sales and budgeted credit sales for September respectively?

Accepted Answer

A) $20,640 and $1722 
B) $13,008 and $1085 
C) $19,680 and $1806 
D) $24,206 and $2330 
A) $20,640 and $1722 
B) $13,008 and $1085 
C) $19,680 and $1806 
D) $24,206 and $2330

Question 12

"Financial budget" is best described by which of the following?

Accepted Answer

A) A company's plan to purchase property, plant and equipment, and other long-term assets 
B) A budget that projects cash inflows, cash outflows, and the end of period budgeted balance sheet 
C) A budget that shows projected sales, purchases, and operating expenses 
D) A system for evaluating the performance of each responsibility center and its manager 
A) A company's plan to purchase property, plant and equipment, and other long-term assets 
B) A budget that projects cash inflows, cash outflows, and the end of period budgeted balance sheet 
C) A budget that shows projected sales, purchases, and operating expenses 
D) A system for evaluating the performance of each responsibility center and its manager

Question 13

Loyal Pet Company expects to sell 6000 beefy dog treats in January and 10,000 in February for $2 each. What will be the total sales revenue reflected in the sales budget for those months?

Accepted Answer

A) January $12,000; February $20,000 
B) January $3000; February $5000 
C) January $5000; February $3000 
D) January $20,000; February $12,000 
A) January $12,000; February $20,000 
B) January $3000; February $5000 
C) January $5000; February $3000 
D) January $20,000; February $12,000

Question 14

On the direct materials budget, the total quantity of direct materials to purchase is computed as

Accepted Answer

A) quantity needed for production + desired end inventory of DM - beginning inventory of DM. 
B) units to be produced + desired end inventory of DM - beginning inventory of DM. 
C) units to be produced - desired end inventory of DM + beginning inventory of DM. 
D) quantity needed for production - desired end inventory of DM + beginning inventory DM. 
A) quantity needed for production + desired end inventory of DM - beginning inventory of DM. 
B) units to be produced + desired end inventory of DM - beginning inventory of DM. 
C) units to be produced - desired end inventory of DM + beginning inventory of DM. 
D) quantity needed for production - desired end inventory of DM + beginning inventory DM.

Question 15

Sally's neighbor recently spent $180 on fitness clothes at the Workout Shop. The neighbor used a credit card to purchase the workout clothes and the store charged a transaction fee of $0.21 plus a fee of 1.50% of the total cost of the clothes charged on the credit cards. What is the total cost of the workout clothes that Sally's neighbor paid to purchase the workout clothes?

Accepted Answer

A) $0.21 
B) $21.00 
C) $1.80 
D) $182.91 
A) $0.21 
B) $21.00 
C) $1.80 
D) $182.91

Question 16

Budgets communicate financial plans to employees at all levels in the company.

Accepted Answer

A) True 
 B)False

Question 17

Desired ending inventory is 25% more than beginning inventory. If purchases total $160,000, which of the following statements is true regarding cost of goods sold (COGS)?

Accepted Answer

A) COGS will exceed cost of goods available for sale. 
B) COGS will be less than purchases. 
C) COGS will exceed purchases. 
D) COGS will equal $55,000. 
A) COGS will exceed cost of goods available for sale. 
B) COGS will be less than purchases. 
C) COGS will exceed purchases. 
D) COGS will equal $55,000.

Question 18

Managers may intentionally build slack into the budget

Accepted Answer

A) to gain the resources they need in the event of budget cuts. 
B) to make their performance look worse. 
C) because they are certain about the future. 
D) to accomplish all of the above. 
A) to gain the resources they need in the event of budget cuts. 
B) to make their performance look worse. 
C) because they are certain about the future. 
D) to accomplish all of the above.

Question 19

Merchandising companies prepare a direct materials budget.

Accepted Answer

A) True 
 B)False

Question 20

Budgets are used to accomplish all of the following tasks, except

Accepted Answer

A) planning for the future. 
B) controlling operations. 
C) recording actual results. 
D) directing operations. 
A) planning for the future. 
B) controlling operations. 
C) recording actual results. 
D) directing operations.

Which of the following is a potential disadvantage of participative budgeting?

In preparing the operating budget, the first step is preparing the

The manager at a merchandising company does not prepare a direct materials budget.

Budget committee is a what-if technique that asks what a result will be if a predicted amount is not achieved or if an underlying assumption changes.

Whistle Works manufacturers safety whistle keychains. They have the following information available to prepare their master budget: Whistle Works sells each whistle for $12. How many units does Whistle Works thinks it will sell in December?

The ________ budget begins with the number of units to be sold.

Strategic planning involves setting short-term goals that extend three to four months into the future.

Which of the following types of cash outlays contains its own budget?

The format of the "cost of goods sold, inventory, and purchases" budget is as follows:

Piatt Company expects cash sales for July of $16,000, and a 23% monthly increase during August and September. Credit sales of $1400 in July should be followed by 29% increases during August and September. What are budgeted cash sales and budgeted credit sales for September respectively?

"Financial budget" is best described by which of the following?

Loyal Pet Company expects to sell 6000 beefy dog treats in January and 10,000 in February for $2 each. What will be the total sales revenue reflected in the sales budget for those months?

On the direct materials budget, the total quantity of direct materials to purchase is computed as

Budgets communicate financial plans to employees at all levels in the company.

Desired ending inventory is 25% more than beginning inventory. If purchases total $160,000, which of the following statements is true regarding cost of goods sold (COGS)?

Managers may intentionally build slack into the budget

Merchandising companies prepare a direct materials budget.

Budgets are used to accomplish all of the following tasks, except

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, Lean Operations, and the Costs of Quality

Process Costing

Cost Behavior

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

Performance Evalulation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

Filters

Exam 9: The Master Budget

Which of the following is a potential disadvantage of participative budgeting?

In preparing the operating budget, the first step is preparing the

The manager at a merchandising company does not prepare a direct materials budget.

Budget committee is a what-if technique that asks what a result will be if a predicted amount is not achieved or if an underlying assumption changes.

Whistle Works manufacturers safety whistle keychains. They have the following information available to prepare their master budget: Whistle Works sells each whistle for $12. How many units does Whistle Works thinks it will sell in December?

The ________ budget begins with the number of units to be sold.

Strategic planning involves setting short-term goals that extend three to four months into the future.

Which of the following types of cash outlays contains its own budget?

The format of the "cost of goods sold, inventory, and purchases" budget is as follows:

Piatt Company expects cash sales for July of $16,000, and a 23% monthly increase during August and September. Credit sales of $1400 in July should be followed by 29% increases during August and September. What are budgeted cash sales and budgeted credit sales for September respectively?

"Financial budget" is best described by which of the following?

Loyal Pet Company expects to sell 6000 beefy dog treats in January and 10,000 in February for $2 each. What will be the total sales revenue reflected in the sales budget for those months?

On the direct materials budget, the total quantity of direct materials to purchase is computed as

Budgets communicate financial plans to employees at all levels in the company.

Desired ending inventory is 25% more than beginning inventory. If purchases total $160,000, which of the following statements is true regarding cost of goods sold (COGS)?

Managers may intentionally build slack into the budget

Merchandising companies prepare a direct materials budget.

Budgets are used to accomplish all of the following tasks, except

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, Lean Operations, and the Costs of Quality

Process Costing

Cost Behavior

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

Performance Evalulation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

Filters