Question 1

Budgeting is used to help companies:

Accepted Answer

A) plan to better satisfy customers 
B) anticipate potential problems 
C) focus on opportunities 
D) All of these answers are correct. 
A) plan to better satisfy customers 
B) anticipate potential problems 
C) focus on opportunities 
D) All of these answers are correct.

Question 2

Long-run planning and short-run planning are best performed independently of each other.

Accepted Answer

A) True 
 B)False

Question 3

The cost of goods sold budget requires all of the following budgets EXCEPT:

Accepted Answer

A) direct material cost budget 
B) manufacturing overhead cost budget 
C) distribution cost budget 
D) direct manufacturing labor cost budget 
A) direct material cost budget 
B) manufacturing overhead cost budget 
C) distribution cost budget 
D) direct manufacturing labor cost budget

Question 4

Answer the following questions using the information below:
Sherry and John Enterprises are using the kaizen approach to budgeting for 2011. The budgeted income statement for January 2011 is as follows:
       Under the kaizen approach, cost of goods sold and variable operating expenses are budgeted to decline by 1% per month.
-What is budgeted cost of goods sold for March 2011?

Accepted Answer

A) $588,060 
B) $592,000 
C) $600,000 
D) $594,000 
A) $588,060 
B) $592,000 
C) $600,000 
D) $594,000

Question 5

Answer the following questions using the information below:
The following information pertains to the January operating budget for Casey Corporation.
  
-At the end of January, budgeted accounts receivable is:

Accepted Answer

A) $20,000 
B) $40,000 
C) $60,000 
D) None of these answers are correct. 
A) $20,000 
B) $40,000 
C) $60,000 
D) None of these answers are correct.

Question 6

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:
  
-How many uniforms need to be produced in 2012?

Accepted Answer

A) 52,000 uniforms 
B) 68,000 uniforms 
C) 60,000 uniforms 
D) 58,000 uniforms 
A) 52,000 uniforms 
B) 68,000 uniforms 
C) 60,000 uniforms 
D) 58,000 uniforms

Question 7

Activity-based budgeting provides better decision-making information than budgeting based solely on output-based cost drivers (units produced, units sold, or revenues).

Accepted Answer

A) True 
 B)False

Question 8

Line managers who feel that top management does NOT believe in the budget are most likely to:

Accepted Answer

A) pick up the slack and participate in the budgeting process 
B) be motivated by the budget 
C) spend little time on the budgeting process 
D) convert the budget to a shorter more reasonable time period 
A) pick up the slack and participate in the budgeting process 
B) be motivated by the budget 
C) spend little time on the budgeting process 
D) convert the budget to a shorter more reasonable time period

Question 9

For next year, Manzo, Inc., has budgeted sales of 30,000 units, target ending finished goods inventory of 1,500 units, and beginning finished goods inventory of 900 units. All other inventories are zero. How many units should be produced next year?

Accepted Answer

A) 29,400 units 
B) 30,000 units 
C) 30,600 units 
D) 32,400 units 
A) 29,400 units 
B) 30,000 units 
C) 30,600 units 
D) 32,400 units

Question 10

It is advantageous to coordinate budgets with:

Accepted Answer

A) suppliers 
B) customers 
C) the marketing and production departments 
D) All of these answers are correct. 
A) suppliers 
B) customers 
C) the marketing and production departments 
D) All of these answers are correct.

Question 11

The sales forecast is influenced by:

Accepted Answer

A) advertising and sales promotions 
B) competition 
C) general economic conditions 
D) All of these answers are correct. 
A) advertising and sales promotions 
B) competition 
C) general economic conditions 
D) All of these answers are correct.

Question 12

It is best to compare this year's performance with last year's actual performance rather than this year's budget.

Accepted Answer

A) True 
 B)False

Question 13

An organization structure is an arrangement of lines of responsibility within the entity.

Accepted Answer

A) True 
 B)False

Question 14

A budget generally includes both financial and nonfinancial aspects of the
plan.

Accepted Answer

A) True 
 B)False

Question 15

Answer the following questions using the information below:
Wallace Company provides the following data for next year:
   The gross profit rate is 40% of sales. Inventory at the end of December is $21,600 and target ending inventory levels are 30% of next month's sales, stated at cost.
-Shamokin Manufacturing produces two products, Big and Bigger. Shamokin expects to sell 10,000 units of product Bigger and to have an inventory of 2,000 units of Bigger on hand at the end of the period. Currently, Shamokin has 800 units of Bigger on hand. Bigger requires two labor operations, molding and polishing. Each unit of Bigger requires one hour of molding and two hours of polishing. The direct labor rate for molding is $20 per molding hour and the direct labor rate for polishing is $25 per polishing hour. The expected cost of direct labor for Bigger is:

Accepted Answer

A) $224,000 
B) $560,000 
C) $616,000 
D) $784,000 
A) $224,000 
B) $560,000 
C) $616,000 
D) $784,000

Question 16

Activity-based budgeting:

Accepted Answer

A) uses one cost driver such as direct labor-hours 
B) uses only output-based cost drivers such as units sold 
C) focuses on activities necessary to produce and sell products and services 
D) classifies costs by functional area within the value chain 
A) uses one cost driver such as direct labor-hours 
B) uses only output-based cost drivers such as units sold 
C) focuses on activities necessary to produce and sell products and services 
D) classifies costs by functional area within the value chain

Question 17

A packaging department is most likely a profit center.

Accepted Answer

A) True 
 B)False

Question 18

Most costs can be easily controlled because they are under the sole influence of one manager.

Accepted Answer

A) True 
 B)False

Question 19

Activity-based budgeting does NOT require:

Accepted Answer

A) knowledge of the organization's activities 
B) specialized expertise in financial management and control 
C) knowledge about how activities affect costs 
D) the ability to see how the organization's different activities fit together 
A) knowledge of the organization's activities 
B) specialized expertise in financial management and control 
C) knowledge about how activities affect costs 
D) the ability to see how the organization's different activities fit together

Question 20

The fundamental purpose of responsibility accounting is to fix blame when budgets are NOT achieved.

Accepted Answer

A) True 
 B)False

Budgeting is used to help companies:

Long-run planning and short-run planning are best performed independently of each other.

The cost of goods sold budget requires all of the following budgets EXCEPT:

Answer the following questions using the information below: The following information pertains to the January operating budget for Casey Corporation. -At the end of January, budgeted accounts receivable is:

Activity-based budgeting provides better decision-making information than budgeting based solely on output-based cost drivers (units produced, units sold, or revenues).

Line managers who feel that top management does NOT believe in the budget are most likely to:

For next year, Manzo, Inc., has budgeted sales of 30,000 units, target ending finished goods inventory of 1,500 units, and beginning finished goods inventory of 900 units. All other inventories are zero. How many units should be produced next year?

It is advantageous to coordinate budgets with:

The sales forecast is influenced by:

It is best to compare this year's performance with last year's actual performance rather than this year's budget.

An organization structure is an arrangement of lines of responsibility within the entity.

A budget generally includes both financial and nonfinancial aspects of the plan.

Activity-based budgeting:

A packaging department is most likely a profit center.

Most costs can be easily controlled because they are under the sole influence of one manager.

Activity-based budgeting does NOT require:

The fundamental purpose of responsibility accounting is to fix blame when budgets are NOT achieved.

The Accountants Role in the Organization

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Flexible Budgets, Direct-Cost Variances, and Management Control

Flexible Budgets, Overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Pricing Decisions and Cost Management

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, Common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, Rework, and Scrap

Balanced Scorecard: Quality, Time, and the Theory of Constraints

Inventory Management, Just-In-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing, and Multinational Considerations

Performance Measurement, Compensation, and Multinational Considerations

Filters

Exam 6: Master Budget and Responsibility Accounting

Budgeting is used to help companies:

Long-run planning and short-run planning are best performed independently of each other.

The cost of goods sold budget requires all of the following budgets EXCEPT:

Answer the following questions using the information below: The following information pertains to the January operating budget for Casey Corporation. -At the end of January, budgeted accounts receivable is:

Activity-based budgeting provides better decision-making information than budgeting based solely on output-based cost drivers (units produced, units sold, or revenues).

Line managers who feel that top management does NOT believe in the budget are most likely to:

For next year, Manzo, Inc., has budgeted sales of 30,000 units, target ending finished goods inventory of 1,500 units, and beginning finished goods inventory of 900 units. All other inventories are zero. How many units should be produced next year?

It is advantageous to coordinate budgets with:

The sales forecast is influenced by:

It is best to compare this year's performance with last year's actual performance rather than this year's budget.

An organization structure is an arrangement of lines of responsibility within the entity.

A budget generally includes both financial and nonfinancial aspects of the plan.

Activity-based budgeting:

A packaging department is most likely a profit center.

Most costs can be easily controlled because they are under the sole influence of one manager.

Activity-based budgeting does NOT require:

The fundamental purpose of responsibility accounting is to fix blame when budgets are NOT achieved.

The Accountants Role in the Organization

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Flexible Budgets, Direct-Cost Variances, and Management Control

Flexible Budgets, Overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Pricing Decisions and Cost Management

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, Common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, Rework, and Scrap

Balanced Scorecard: Quality, Time, and the Theory of Constraints

Inventory Management, Just-In-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing, and Multinational Considerations

Performance Measurement, Compensation, and Multinational Considerations

Filters