Question 1

________ uses a "what-if" technique that examines how results will change if the originally predicted data changes.

Accepted Answer

A) A sales forecast 
B) A sensitivity analysis 
C) A pro forma financial statement 
D) The statement of cash flows 
A) A sales forecast 
B) A sensitivity analysis 
C) A pro forma financial statement 
D) The statement of cash flows

Question 2

When performing a sensitivity analysis, if the selling price per unit is increased, then the:

Accepted Answer

A) per unit fixed administrative costs will increase 
B) per unit direct materials purchase price will increase 
C) total volume of sales will increase 
D) total costs for sales commissions and other nonmanufacturing variable costs will increase 
A) per unit fixed administrative costs will increase 
B) per unit direct materials purchase price will increase 
C) total volume of sales will increase 
D) total costs for sales commissions and other nonmanufacturing variable costs will increase

Question 3

A good budgeting system forces managers to examine the business as they plan, so they can:

Accepted Answer

A) detect inaccurate historical records 
B) set specific expectations against which actual results can be compared 
C) complete the budgeting task on time 
D) get promoted for doing a good job 
A) detect inaccurate historical records 
B) set specific expectations against which actual results can be compared 
C) complete the budgeting task on time 
D) get promoted for doing a good job

Question 4

Answer the following questions using the information below:
Brent Enterprises reports the year-end information from 2011 as follows:
       Brent is developing the 2012 budget. In 2012 the company would like to increase selling prices by 4%, and as a result expects a decrease in sales volume of 10%. All other operating expenses are expected to remain constant. Assume that COGS is a variable cost and that operating expenses are a fixed cost.
-What is budgeted sales for 2012?

Accepted Answer

A) $291,200 
B) $262,080 
C) $252,000 
D) $280,000 
A) $291,200 
B) $262,080 
C) $252,000 
D) $280,000

Question 5

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 gross margin for March 2011?

Accepted Answer

A) $392,040 
B) $396,000 
C) $408,040 
D) $411,940 
A) $392,040 
B) $396,000 
C) $408,040 
D) $411,940

Question 6

The direct materials usage budget is based on:

Accepted Answer

A) the units to be produced during a period 
B) budgeted sales dollars 
C) the predetermined factory overhead rate 
D) the amount of labor-hours worked 
A) the units to be produced during a period 
B) budgeted sales dollars 
C) the predetermined factory overhead rate 
D) the amount of labor-hours worked

Question 7

Answer the following questions using the information below:
The following information pertains to Hepburn Company:
    
-How much cash will be collected from customers in March?

Accepted Answer

A) $94,000 
B) $86,000 
C) $100,000 
D) None of these answers are correct. 
A) $94,000 
B) $86,000 
C) $100,000 
D) None of these answers are correct.

Question 8

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 ending inventory is:

Accepted Answer

A) $20,000 
B) $28,000 
C) $40,000 
D) None of these answers are correct. 
A) $20,000 
B) $28,000 
C) $40,000 
D) None of these answers are correct.

Question 9

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.
-Purchases budgeted for February total:

Accepted Answer

A) $69,120 
B) $60,480 
C) $115,200 
D) $64,800 
A) $69,120 
B) $60,480 
C) $115,200 
D) $64,800

Question 10

If a cost is considered controllable, it indicates that all aspects of the cost are under the control of the manager of the responsibility center to which that cost is assigned.

Accepted Answer

A) True 
 B)False

Question 11

Activity-based budgeting would separately estimate:

Accepted Answer

A) the cost of overhead for a department 
B) a plant-wide cost-driver rate 
C) the cost of a setup activity 
D) All of these answers are correct. 
A) the cost of overhead for a department 
B) a plant-wide cost-driver rate 
C) the cost of a setup activity 
D) All of these answers are correct.

Question 12

Actual results should NOT be compared against past performance because:

Accepted Answer

A) past results may contain mistakes and substandard performance 
B) past results will never happen again 
C) past performance is an indicator of future performance 
D) future conditions will be similar to past conditions 
A) past results may contain mistakes and substandard performance 
B) past results will never happen again 
C) past performance is an indicator of future performance 
D) future conditions will be similar to past conditions

Question 13

The time coverage of a budget should be:

Accepted Answer

A) one year 
B) guided by the purpose of the budget 
C) cover design through manufacture and sale of the product 
D) shorter rather than longer 
A) one year 
B) guided by the purpose of the budget 
C) cover design through manufacture and sale of the product 
D) shorter rather than longer

Question 14

Answer the following questions using the information below:
Monetary Company has the following sales budget for the last six months of 2011:
   Historically, the cash collection of sales has been as follows:
  
-Cash collections for September are:

Accepted Answer

A) $143,000 
B) $173,400 
C) $199,000 
D) $204,000 
A) $143,000 
B) $173,400 
C) $199,000 
D) $204,000

Question 15

The possibility of exchange rate fluctuations does NOT influence the budgeting procedures in a multinational corporation.

Accepted Answer

A) True 
 B)False

Question 16

A stretch budget is a budget that:

Accepted Answer

A) crosses more than one responsibility center 
B) represents a challenging, but achievable level of performance 
C) is impossible to implement in a cost center 
D) is designed to include the effects of exchange rate fluctuations 
A) crosses more than one responsibility center 
B) represents a challenging, but achievable level of performance 
C) is impossible to implement in a cost center 
D) is designed to include the effects of exchange rate fluctuations

Question 17

Financing decisions deal with how to best use the limited resources of an organization.

Accepted Answer

A) True 
 B)False

Question 18

Answer the following questions using the information below:
The following information pertains to Hepburn Company:
    
-How much cash will be disbursed in total in March?

Accepted Answer

A) $42,000 
B) $50,000 
C) $88,400 
D) $96,400 
A) $42,000 
B) $50,000 
C) $88,400 
D) $96,400

Question 19

Picture Pretty manufactures picture frames. Sales for August are expected to be 10,000 units of various sizes. Historically, the average frame requires four feet of framing, one square foot of glass, and two square feet of backing. Beginning inventory includes 1,500 feet of framing, 500 square feet of glass, and 500 square feet of backing. Current prices are $0.30 per foot of framing, $6.00 per square foot of glass, and $2.25 per square foot of backing. Ending inventory should be 150% of beginning inventory. Purchases are paid for in the month acquired.
Required:
a. Determine the quantity of framing, glass, and backing that is to be purchased during August.
b. Determine the total costs of direct materials for August purchases.

Accepted Answer

@#IMG-DLM& @#IMG-DLM& @#IMG-DLM& b. Cost

Question 20

Responsibility accounting:

Accepted Answer

A) emphasizes controllability 
B) focuses on whom should be asked about the information 
C) attempts to assign blame for problems to a specific manager 
D) All of these answers are correct. 
A) emphasizes controllability 
B) focuses on whom should be asked about the information 
C) attempts to assign blame for problems to a specific manager 
D) All of these answers are correct.

________ uses a "what-if" technique that examines how results will change if the originally predicted data changes.

When performing a sensitivity analysis, if the selling price per unit is increased, then the:

A good budgeting system forces managers to examine the business as they plan, so they can:

The direct materials usage budget is based on:

Answer the following questions using the information below: The following information pertains to Hepburn Company: -How much cash will be collected from customers in March?

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 ending inventory is:

If a cost is considered controllable, it indicates that all aspects of the cost are under the control of the manager of the responsibility center to which that cost is assigned.

Activity-based budgeting would separately estimate:

Actual results should NOT be compared against past performance because:

The time coverage of a budget should be:

Answer the following questions using the information below: Monetary Company has the following sales budget for the last six months of 2011: Historically, the cash collection of sales has been as follows: -Cash collections for September are:

The possibility of exchange rate fluctuations does NOT influence the budgeting procedures in a multinational corporation.

A stretch budget is a budget that:

Financing decisions deal with how to best use the limited resources of an organization.

Answer the following questions using the information below: The following information pertains to Hepburn Company: -How much cash will be disbursed in total in March?

Responsibility accounting:

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

________ uses a "what-if" technique that examines how results will change if the originally predicted data changes.

When performing a sensitivity analysis, if the selling price per unit is increased, then the:

A good budgeting system forces managers to examine the business as they plan, so they can:

The direct materials usage budget is based on:

Answer the following questions using the information below: The following information pertains to Hepburn Company: -How much cash will be collected from customers in March?

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 ending inventory is:

If a cost is considered controllable, it indicates that all aspects of the cost are under the control of the manager of the responsibility center to which that cost is assigned.

Activity-based budgeting would separately estimate:

Actual results should NOT be compared against past performance because:

The time coverage of a budget should be:

Answer the following questions using the information below: Monetary Company has the following sales budget for the last six months of 2011: Historically, the cash collection of sales has been as follows: -Cash collections for September are:

The possibility of exchange rate fluctuations does NOT influence the budgeting procedures in a multinational corporation.

A stretch budget is a budget that:

Financing decisions deal with how to best use the limited resources of an organization.

Answer the following questions using the information below: The following information pertains to Hepburn Company: -How much cash will be disbursed in total in March?

Responsibility accounting:

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