Question 1

Kaizen budgeting,adapted from the Japanese,provides that

Accepted Answer

A) activity costs are budgeted based on current practices,methods,and costs. 
B) continuous budgeting methods are employed. 
C) target pricing is key to budget preparation. 
D) continuous improvements are incorporated into the budget. 
E) a rolling budget is employed to keep a handle on management. 
A) activity costs are budgeted based on current practices,methods,and costs. 
B) continuous budgeting methods are employed. 
C) target pricing is key to budget preparation. 
D) continuous improvements are incorporated into the budget. 
E) a rolling budget is employed to keep a handle on management. D

Question 2

Barrieland Merchandising Firm is developing its budgets for 2016.The 2015 income statement is as follows:
   
Selling prices will increase by 10 percent and sales volume in units will decrease by 5 percent.The cost of goods sold as a percent of sales will increase to 62 percent.Other than amortization,all operating costs are variable.
Required:
Prepare a budgeted income statement for 2016.

Accepted Answer

The answer of Barrieland Merchandising Firm is developing its budgets...

Question 3

The actual data resulting from a strategy should be compared to budgeted results.

Accepted Answer

A) True 
 B)False  True

Question 4

Budgeted financial statements are also referred to as pro forma statements.

Accepted Answer

A) True 
 B)False

Question 5

Budgetary slack is automatically included in the revenue budget.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following statements is TRUE concerning controllability of costs?

Accepted Answer

A) Fixed costs are controllable costs. 
B) Controllable costs are easy to identify with much accuracy. 
C) Senior managers rarely differ in their reliance on controllable costs for performance measurement. 
D) All costs are controllable,given a sufficiently long time period. 
E) Most costs are under the sole influence of any one manager. 
A) Fixed costs are controllable costs. 
B) Controllable costs are easy to identify with much accuracy. 
C) Senior managers rarely differ in their reliance on controllable costs for performance measurement. 
D) All costs are controllable,given a sufficiently long time period. 
E) Most costs are under the sole influence of any one manager.

Question 7

The Doran Company prepared the following revenue budget:
   
In addition,the gross profit rate is 40 percent and the desired inventory level is 30 percent of next month's cost of goods sold.
Required:
Prepare a purchases budget for April through June.

Accepted Answer

The answer of The Doran Company prepared the following revenue...

Question 8

Spirit Company sells three products with the following seasonal sales pattern:
   
The annual sales budget shows forecasts for the different products and their expected selling price per unit as follows:
   
Required:
Prepare a sales budget,in units and dollars,by quarters for the company for the coming year.

Accepted Answer

The answer of Spirit Company sells three products with the...

Question 9

The priority approach to budgeting is an incremental approach.

Accepted Answer

A) True 
 B)False

Question 10

Use the information below to answer the following question(s).
Marguerite Inc..expects to sell 20,000 pool cues for $20.00 each.Direct materials costs are $2.00,direct manufacturing labour is $12.00,and manufacturing overhead is $0.80 per pool cue.Each pool cue requires 0.5 kilograms (kg)of material which is all added at the start of production.The units in work-in-process beginning and ending inventory were half complete as to direct labour and manufacturing overhead costs;the units in beginning inventory are completed before new units are started..Each pool cue requires one hour of direct labour,and manufacturing overhead is allocated based on direct labour hours.The following inventory levels are expected to apply to 2016:
  
-How many pool cues need to be produced in 2016?

Accepted Answer

A) 22,500 cues 
B) 18,000 cues 
C) 20,000 cues 
D) 19,500 cues 
E) 20,500 cues 
A) 22,500 cues 
B) 18,000 cues 
C) 20,000 cues 
D) 19,500 cues 
E) 20,500 cues

Question 11

Planning the performance of the organization,providing a frame of reference,and investigating variances are part of the

Accepted Answer

A) budgetary cycle. 
B) cash budget. 
C) financing budget. 
D) master budget. 
E) production budget. 
A) budgetary cycle. 
B) cash budget. 
C) financing budget. 
D) master budget. 
E) production budget.

Question 12

Use the information below to answer the following question(s).
Samson Inc.expects to sell 10,000 barbells for $18.00 each.Direct materials costs are $5.00,direct manufacturing labour is $6.00,and manufacturing overhead is $2.50 per barbell.Each barbell requires 6 kilograms (kg)of material which is all added at the start of production.The units in work-in-process beginning and ending inventory were half complete as to direct labour and manufacturing overhead costs;the units in beginning inventory are completed before new units are started..Each barbell requires one-quarter hour of direct labour,and manufacturing overhead is allocated based on direct labour hours.Marketing costs are $2.00 per barbell.The following inventory levels are expected to apply to 2016:
  
-How many kilograms of material will need to be purchased for 2016 production and inventory requirements?

Accepted Answer

A) 60,900 kg. 
B) 60,600 kg. 
C) 60,300 kg. 
D) 60,000 kg. 
E) 62,100 kg. 
A) 60,900 kg. 
B) 60,600 kg. 
C) 60,300 kg. 
D) 60,000 kg. 
E) 62,100 kg.

Question 13

Nittany Company sells three products with the following seasonal sales pattern:
   
The annual sales budget shows forecasts for the different products and their expected selling price per unit as follows:
   
Required:
Prepare a sales budget,in units and dollars,by quarters for the company for the coming year.

Accepted Answer

The answer of Nittany Company sells three products with the...

Question 14

Use the information below to answer the following question(s).
Daniel Inc.expects to sell 6,000 ceramic vases for $20 each in 2015.Direct materials costs are $2,direct manufacturing labour is $10,and manufacturing overhead is $3 per vase.Each vase requires 0.5 kilograms (kg)of material which is all added at the start of production.The units in work-in-process beginning and ending inventory were half complete as to direct labour and manufacturing overhead costs;the units in beginning inventory are completed before new units are started.Each vase requires one hour of direct labour,and manufacturing overhead is allocated based on direct labour hours.The following inventory levels are expected to apply to 2015:
  
-What are the 2015 budgeted costs for direct manufacturing labour?

Accepted Answer

A) $62,000 
B) $60,000 
C) $61,000 
D) $59,000 
E) $63,000 
A) $62,000 
B) $60,000 
C) $61,000 
D) $59,000 
E) $63,000

Question 15

Use the information below to answer the following question(s).
Country Heather manufactures flowerpots.It expects to sell 40,000 flowerpots in 2016.The company had enough beginning inventory of direct materials to produce 48,000 units.Beginning inventory of finished units totalled 4,000 with a target ending inventory of 5,000 units.The flowerpots sell for $6.00 and the company keeps no work-in-process inventory.Direct materials costs for each flowerpot total $2.00 while direct labour is $1.00.Factory overhead is $0.40 per flowerpot.
-What will be Country Heather's total costs incurred for direct materials,direct manufacturing labour,and manufacturing overhead,respectively,for 2016?

Accepted Answer

A) $0;$40,000;$16,000 
B) $0;$41,000;$16,000 
C) $80,000;$40,000;$16,000 
D) $82,000;$41,000;$16,400 
E) $84,000;$40,000;$16,400 
A) $0;$40,000;$16,000 
B) $0;$41,000;$16,000 
C) $80,000;$40,000;$16,000 
D) $82,000;$41,000;$16,400 
E) $84,000;$40,000;$16,400

Question 16

Answer the following question(s)using the information below.
The following information pertains to Tiffany Company:
   Cash is collected from customers in the following manner:
- Month of sale 30%
- Month following the sale 70%
40% of purchases are paid for in cash in the month of purchase,and the balance is paid the following month.
Labour costs are 20% of sales.Other operating costs are $15,000 per month (including $4,000 of depreciation).Both of these are paid in the month incurred.The cash balance on March 1 is $4,000.A minimum cash balance of $3,000 is required at the end of the month.Money can be borrowed in multiples of $1,000.
-How much cash will be collected from customers in March?

Accepted Answer

A) $47,000 
B) $45,000 
C) $50,000 
D) $33,000 
E) $43,000 
A) $47,000 
B) $45,000 
C) $50,000 
D) $33,000 
E) $43,000

Question 17

Use the information below to answer the following question(s).
Boone Hobbies,a wholesaler,has a sales budget for next month of $600,000.Cost of units sold is expected to be 40 percent of sales.All units are paid for in the month following purchase.The beginning inventory of units is $20,000,and an ending amount of $24,000 is desired.Beginning accounts payable is $152,000.
-Boone Hobbies budgeted purchases for next month is expected to be

Accepted Answer

A) $240,000. 
B) $264,000. 
C) $225,000. 
D) $360,000. 
E) $244,000. 
A) $240,000. 
B) $264,000. 
C) $225,000. 
D) $360,000. 
E) $244,000.

Question 18

Gerdie Company has the following information:
   
In addition,the gross profit rate is 40% and the desired ending inventory level is 30% of next month's cost of sales.
Required:
Prepare a purchases budget for April through June.

Accepted Answer

The answer of Gerdie Company has the following information:
 ...

Question 19

The master budget embraces the impact of

Accepted Answer

A) operating and managerial decisions. 
B) operating and financing decisions. 
C) financing and managerial decisions. 
D) operating,managerial,and financing decisions. 
E) the differences between the budget and the actual costs,for a given cycle. 
A) operating and managerial decisions. 
B) operating and financing decisions. 
C) financing and managerial decisions. 
D) operating,managerial,and financing decisions. 
E) the differences between the budget and the actual costs,for a given cycle.

Question 20

The objective of activity-based budgeting is

Accepted Answer

A) to allow multiple activities to be used as cost drivers rather than just one item such as direct labour hours. 
B) to compute the cost of performing activities. 
C) to refine the budgeting process by assigning indirect costs into activity cost pools. 
D) to classify costs by functional area and assign them to related activities. 
E) to classify costs as to whether they are value added or non-value added. 
A) to allow multiple activities to be used as cost drivers rather than just one item such as direct labour hours. 
B) to compute the cost of performing activities. 
C) to refine the budgeting process by assigning indirect costs into activity cost pools. 
D) to classify costs by functional area and assign them to related activities. 
E) to classify costs as to whether they are value added or non-value added.

Kaizen budgeting,adapted from the Japanese,provides that

The actual data resulting from a strategy should be compared to budgeted results.

Budgeted financial statements are also referred to as pro forma statements.

Budgetary slack is automatically included in the revenue budget.

Which of the following statements is TRUE concerning controllability of costs?

The Doran Company prepared the following revenue budget: In addition,the gross profit rate is 40 percent and the desired inventory level is 30 percent of next month's cost of goods sold. Required: Prepare a purchases budget for April through June.

The priority approach to budgeting is an incremental approach.

Planning the performance of the organization,providing a frame of reference,and investigating variances are part of the

Gerdie Company has the following information: In addition,the gross profit rate is 40% and the desired ending inventory level is 30% of next month's cost of sales. Required: Prepare a purchases budget for April through June.

The master budget embraces the impact of

The objective of activity-based budgeting is

The Accountants Vital Role in Decision Making

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Management

Flexible Budgets,variances,and Management Control: I

Flexible Budgets,variances,and Management Control: II

Income Effects of Denominator Level on Inventory Valuation

Analysis of Cost Behaviour

Decision Making and Relevant Information

Pricing Decisions, product Profitability Decisions, and Cost Management

Strategy,balanced Scorecard,and Profitability Analysis

Period Cost Allocation

Cost Allocation: Joint Products and Byproducts

Revenue and Customer Profitability Analysis

Process Costing

Spoilage, rework, and Scrap

Inventory Cost Management Strategies

Capital Budgeting: Methods of Investment Analysis

Transfer Pricing and Multinational Management Control Systems

Multinational Performance Measurement and Compensation

Filters

Exam 6: Master Budget and Responsibility Accounting

Kaizen budgeting,adapted from the Japanese,provides that

The actual data resulting from a strategy should be compared to budgeted results.

Budgeted financial statements are also referred to as pro forma statements.

Budgetary slack is automatically included in the revenue budget.

Which of the following statements is TRUE concerning controllability of costs?

The Doran Company prepared the following revenue budget: In addition,the gross profit rate is 40 percent and the desired inventory level is 30 percent of next month's cost of goods sold. Required: Prepare a purchases budget for April through June.

The priority approach to budgeting is an incremental approach.

Planning the performance of the organization,providing a frame of reference,and investigating variances are part of the

Gerdie Company has the following information: In addition,the gross profit rate is 40% and the desired ending inventory level is 30% of next month's cost of sales. Required: Prepare a purchases budget for April through June.

The master budget embraces the impact of

The objective of activity-based budgeting is

The Accountants Vital Role in Decision Making

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Management

Flexible Budgets,variances,and Management Control: I

Flexible Budgets,variances,and Management Control: II

Income Effects of Denominator Level on Inventory Valuation

Analysis of Cost Behaviour

Decision Making and Relevant Information

Pricing Decisions, product Profitability Decisions, and Cost Management

Strategy,balanced Scorecard,and Profitability Analysis

Period Cost Allocation

Cost Allocation: Joint Products and Byproducts

Revenue and Customer Profitability Analysis

Process Costing

Spoilage, rework, and Scrap

Inventory Cost Management Strategies

Capital Budgeting: Methods of Investment Analysis

Transfer Pricing and Multinational Management Control Systems

Multinational Performance Measurement and Compensation

Filters