Exam 6: Master Budget and Responsibility Accounting

If inventoriable costs in the operating budget are going to be in accordance with Generally Accepted Accounting Principles (GAAP), they include only variable manufacturing costs.

Answer the following questions using the information below: Beat, Inc., expects to sell 60,000 athletic uniforms for $80 each in 2012. Direct materials costs are $20, direct manufacturing labor is $8, and manufacturing overhead is $6 for each uniform. The following inventory levels apply to 2011: -What is the amount budgeted for cost of goods sold in 2012?

The financial budget is that part of the master budget that includes the capital expenditures budget, cash budget, budgeted balance sheet, and the budgeted statement of cash flows.

Budgeting slack is most likely to occur when a firm uses the budget only as a planning device and NOT for control.

Describe the concept of kaizen budgeting.

Budgeting includes only the financial aspects of the plan and NOT any nonfinancial aspects such as the number of physical units manufactured.

Variances between actual and budgeted amounts inform management about performance relative to the budget.

Answer the following questions using the information below: Kason, Inc., expects to sell 20,000 pool cues for $24.00 each. Direct materials costs are $4.00, direct manufacturing labor is $8.00, and manufacturing overhead is $1.60 per pool cue. The following inventory levels apply to 2011: -How many pool cues need to be produced in 2012?

Which budget is NOT necessary to prepare the budgeted balance sheet?

Computer-based financial planning models are mathematical statements of the interrelationships among operating activities, financial activities, and other factors that affect the budget.

Building in budgetary slack includes:

The self-liquidating cycle is the movement from cash to inventories to receivables and back to cash.

Multinational budgeting is useful for everything EXCEPT:

Listed below are elements of the master budget. Determine whether each budget is an operating budget or a financial budget. Place an O for operating budget or F for a financial budget.

Answer the following questions using the information below: The following information pertains to the January operating budget for Casey Corporation. -For January, budgeted net income is:

The use of activity-based budgeting is growing because of:

How is budgeting for a multinational corporation different than budgeting for a corporation that is strictly domestic?

A responsibility center can be structured to promote better alignment of individual and company goals.

________ is the usual starting point for budgeting.

Since fixed manufacturing overhead is fixed, it is NOT normally included in the operating budget.