Question 1

A rolling budget is useful because the organization can continue to budget its operations 12 months into the future.

Accepted Answer

A) True 
 B)False

Question 2

Pristine Yards Manufacturing produces weed whackers. On March 31, Pristine Yards Manufacturing had 144 weed whackers in inventory. The company has a policy that the ending inventory in any month must be 12% of the following month's expected sales. Pristine Yards Manufacturing expects to sell the following number of weed whackers in each of the next four months:
   Required:
Prepare a production budget for the second quarter, with a column for each month and for the quarter.

Accepted Answer

The answer of Pristine Yards Manufacturing produces weed whackers. On...

Question 3

Goliath Company prepared the following purchases budget:   All purchases are paid for as follows: 45% in the month of purchase, 40% in the following month, and 15% two months after purchase.
What are the total cash disbursements in August to account for the purchase of merchandise at Goliath Company?

Accepted Answer

A) $45,930 
B) $51,795 
C) $39,410 
D) $17,505 
A) $45,930 
B) $51,795 
C) $39,410 
D) $17,505

Question 4

Which of the following budgets is the cornerstone of the master budget?

Accepted Answer

A) sales 
B) cash 
C) budgeted balance sheet 
D) operating expense 
A) sales 
B) cash 
C) budgeted balance sheet 
D) operating expense

Question 5

Which of the following is an advantage of zero-based budgeting?

Accepted Answer

A) Zero-based budgeting is time consuming. 
B) Zero-based budgeting forces managers to justify each dollar in the budget to ensure that some expenses are lower in a current year compared to what they were in previous years. 
C) Zero-based budgeting is labor intensive. 
D) All of the above are advantages. 
A) Zero-based budgeting is time consuming. 
B) Zero-based budgeting forces managers to justify each dollar in the budget to ensure that some expenses are lower in a current year compared to what they were in previous years. 
C) Zero-based budgeting is labor intensive. 
D) All of the above are advantages.

Question 6

One of the key benefits of budgeting is that it forces managers to plan.

Accepted Answer

A) True 
 B)False

Question 7

Beloved Baby Company manufactures and sells children's strollers. Each stroller requires eight screws. For September, Beloved Baby Company will begin September with 360 screws in its beginning inventory. Beloved Baby Company has budgeted stroller sales of 560 strollers, while 590 strollers are scheduled to be produced. How many screws should Beloved Baby Company purchase in September?

Accepted Answer

A) 200 
B) 4360 
C) 5080 
D) 4720 
A) 200 
B) 4360 
C) 5080 
D) 4720

Question 8

Frisbee Enterprises produces frisbees. Frisbee Enterprises has the following sales projections for the upcoming year:
   Inventory at the beginning of the year was 6,000 frisbees. Frisbee Enterprises wants to have 30% of the next quarter's sales in units on hand at the end of each quarter. How many frisbees should Frisbee Enterprises produce during the first quarter? Show your calculations.

Accepted Answer

The answer of Frisbee Enterprises produces frisbees. Frisbee Enterprises has...

Question 9

All of the following are functions of the budget committee except

Accepted Answer

A) review the budgets it submits for approval in an organization. 
B) determine the bonuses the organization awards to employees that achieve the target budget. 
C) approve the final budget it expects the organization to implement. 
D) remove unwarranted slack in the workplace. 
A) review the budgets it submits for approval in an organization. 
B) determine the bonuses the organization awards to employees that achieve the target budget. 
C) approve the final budget it expects the organization to implement. 
D) remove unwarranted slack in the workplace.

Question 10

Managers may intentionally build slack into the budget

Accepted Answer

A) because they are uncertain about the future. 
B) to make their performance appear better. 
C) to acquire the resources they need in the event the organization implements a budget cut. 
D) because all of the above are true. 
A) because they are uncertain about the future. 
B) to make their performance appear better. 
C) to acquire the resources they need in the event the organization implements a budget cut. 
D) because all of the above are true.

Question 11

Romona Company expects its November sales to be 20% higher than its October sales of $160,000. All sales are on credit and are collected as follows: 30% in the month of the sale and 65% in the following month. Purchases were $60,000 in October and are expected to be $120,000 in November. Purchases are paid 40% in the month of purchase and 60% in the following month. The cash balance on November 1 is $13,400. The cash balance on November 30 will be

Accepted Answer

A) $77,600 
B) $91,000 
C) $175,000 
D) $64,200 
A) $77,600 
B) $91,000 
C) $175,000 
D) $64,200

Question 12

In which of the following company types does the manager use a capital expenditures budget?

Accepted Answer

A) Manufacturing 
B) Merchandising 
C) Service 
D) All of the above 
A) Manufacturing 
B) Merchandising 
C) Service 
D) All of the above

Question 13

Goliath Company prepared the following purchases budget:   All purchases are paid for as follows: 60% in the month of purchase, 35% in the following month, and 5% two months after purchase.
What are the cash disbursements in August to account for the June purchases at Goliath Company?

Accepted Answer

A) $20,520 
B) $16,065 
C) $11,970 
D) $1710 
A) $20,520 
B) $16,065 
C) $11,970 
D) $1710

Question 14

Hammond's Cookie Toppings makes payments on its inventory purchases as follows: 30% in the month of purchase, 65% in the following month, and 5% in the second month following purchase. Budgeted inventory purchases for June, July, and August are $$16,000, $19,000 and $22,000, respectively. What is the budgeted amount of cash payments to account for inventory in August at Hammond's Cookie Toppings?

Accepted Answer

A) $18,250 
B) $6550 
C) $2850 
D) $19,750 
A) $18,250 
B) $6550 
C) $2850 
D) $19,750

Question 15

Sander Enterprises prepared the following sales budget:   The expected gross profit rate is 10% and the inventory at the end of February was $11,000. Desired inventory levels at the end of the month are 20% of the next month's cost of goods sold.
What are the total purchases budgeted for April?

Accepted Answer

A) $16,200 
B) $13,500 
C) $12,600 
D) $14,400 
A) $16,200 
B) $13,500 
C) $12,600 
D) $14,400

Question 16

Which of the following terms is useful because it compares "actual" revenues and expenses against "budgeted" revenues and expenses?

Accepted Answer

A) Responsibility center 
B) Capital budget 
C) Performance report 
D) Sensitivity analysis 
A) Responsibility center 
B) Capital budget 
C) Performance report 
D) Sensitivity analysis

Question 17

Distribution Corporation collects 35% of a month's sales in the month of sale, 45% in the month following sale, and 20% in the second month following sale. Budgeted sales for the upcoming four months are:   The amount of cash that will be collected in July is budgeted to be

Accepted Answer

A) $59,500 
B) $133,500 
C) $193,000 
D) $190,000 
A) $59,500 
B) $133,500 
C) $193,000 
D) $190,000

Question 18

The ________ budget is the only budget stated only in units, not dollars.

Accepted Answer

A) production 
B) sales 
C) direct materials 
D) manufacturing overhead 
A) production 
B) sales 
C) direct materials 
D) manufacturing overhead

Question 19

Which of the following items is a component of a cash payments budget?

Accepted Answer

A) Bad debt expense 
B) Depreciation expense 
C) Cash dividends 
D) Gains on sales of equipment 
A) Bad debt expense 
B) Depreciation expense 
C) Cash dividends 
D) Gains on sales of equipment

Question 20

Kotrick Company has beginning inventory of 17,000 units and expected sales of 21,000 units. If the desired ending inventory is 20,000 units, how many units should be produced?

Accepted Answer

A) 18,000 
B) 42,000 
C) 16,000 
D) 24,000 
A) 18,000 
B) 42,000 
C) 16,000 
D) 24,000

A rolling budget is useful because the organization can continue to budget its operations 12 months into the future.

Goliath Company prepared the following purchases budget: All purchases are paid for as follows: 45% in the month of purchase, 40% in the following month, and 15% two months after purchase. What are the total cash disbursements in August to account for the purchase of merchandise at Goliath Company?

Which of the following budgets is the cornerstone of the master budget?

Which of the following is an advantage of zero-based budgeting?

One of the key benefits of budgeting is that it forces managers to plan.

All of the following are functions of the budget committee except

Managers may intentionally build slack into the budget

In which of the following company types does the manager use a capital expenditures budget?

Goliath Company prepared the following purchases budget: All purchases are paid for as follows: 60% in the month of purchase, 35% in the following month, and 5% two months after purchase. What are the cash disbursements in August to account for the June purchases at Goliath Company?

Sander Enterprises prepared the following sales budget: The expected gross profit rate is 10% and the inventory at the end of February was $11,000. Desired inventory levels at the end of the month are 20% of the next month's cost of goods sold. What are the total purchases budgeted for April?

Which of the following terms is useful because it compares "actual" revenues and expenses against "budgeted" revenues and expenses?

Distribution Corporation collects 35% of a month's sales in the month of sale, 45% in the month following sale, and 20% in the second month following sale. Budgeted sales for the upcoming four months are: The amount of cash that will be collected in July is budgeted to be

The ________ budget is the only budget stated only in units, not dollars.

Which of the following items is a component of a cash payments budget?

Kotrick Company has beginning inventory of 17,000 units and expected sales of 21,000 units. If the desired ending inventory is 20,000 units, how many units should be produced?

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

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Exam 9: The Master Budget

A rolling budget is useful because the organization can continue to budget its operations 12 months into the future.

Goliath Company prepared the following purchases budget: All purchases are paid for as follows: 45% in the month of purchase, 40% in the following month, and 15% two months after purchase. What are the total cash disbursements in August to account for the purchase of merchandise at Goliath Company?

Which of the following budgets is the cornerstone of the master budget?

Which of the following is an advantage of zero-based budgeting?

One of the key benefits of budgeting is that it forces managers to plan.

All of the following are functions of the budget committee except

Managers may intentionally build slack into the budget

In which of the following company types does the manager use a capital expenditures budget?

Goliath Company prepared the following purchases budget: All purchases are paid for as follows: 60% in the month of purchase, 35% in the following month, and 5% two months after purchase. What are the cash disbursements in August to account for the June purchases at Goliath Company?

Sander Enterprises prepared the following sales budget: The expected gross profit rate is 10% and the inventory at the end of February was $11,000. Desired inventory levels at the end of the month are 20% of the next month's cost of goods sold. What are the total purchases budgeted for April?

Which of the following terms is useful because it compares "actual" revenues and expenses against "budgeted" revenues and expenses?

Distribution Corporation collects 35% of a month's sales in the month of sale, 45% in the month following sale, and 20% in the second month following sale. Budgeted sales for the upcoming four months are: The amount of cash that will be collected in July is budgeted to be

The ________ budget is the only budget stated only in units, not dollars.

Which of the following items is a component of a cash payments budget?

Kotrick Company has beginning inventory of 17,000 units and expected sales of 21,000 units. If the desired ending inventory is 20,000 units, how many units should be produced?

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