Question 1

The human resources manager projects the number of direct labor hours to be worked by employees.

Accepted Answer

A) True 
 B)False

Question 2

What is a common method of accessing short-term financing?

Accepted Answer

Securing a line of credit with

Question 3

The inventory,purchases,and cost of goods sold budget determines cost of goods sold for the budgeted income statement,and ending Merchandise Inventory for the budgeted balance sheet.

Accepted Answer

A) True 
 B)False

Question 4

Bulldog,Inc.has budgeted sales for the first quarter of the next year to be 45,000 units.The inventory on hand at the beginning of quarter is 5000 units.The desired ending inventory is 3000 units.Calculate the budgeted production for the first quarter.

Accepted Answer

A)  3000 units 
B)  43,000 units 
C)  40,000 units 
D)  48,000 units 
A)  3000 units 
B)  43,000 units 
C)  40,000 units 
D)  48,000 units

Question 5

Which of the following would not appear on a multiple-step budgeted income statement for a manufacturer?

Accepted Answer

A)  gross profit 
B)  income tax expense 
C)  operating income 
D)  salaries payable 
A)  gross profit 
B)  income tax expense 
C)  operating income 
D)  salaries payable

Question 6

To calculate budgeted direct labor costs,multiply the number of units to be produced by the number of projected direct labor hours.Next,multiply that total by the average direct cost per hour.

Accepted Answer

A) True 
 B)False

Question 7

For a merchandising company,what is the formula used to determine the amount of merchandise inventory to be purchased?

Accepted Answer

Cost of goods sold + Desired e

Question 8

Which of the following statements regarding the manufacturing overhead budget is incorrect?

Accepted Answer

A)  Both fixed and variable manufacturing overhead costs are budgeted. 
B)  The manufacturing overhead budget calculates the budgeted overhead costs for the year and also the predetermined overhead allocation rate for the year. 
C)  The cost accountant and the production manager work together to project variable and fixed manufacturing costs. 
D)  Depreciation on manufacturing equipment is not included because the production manager has no control over that cost allocation. 
A)  Both fixed and variable manufacturing overhead costs are budgeted. 
B)  The manufacturing overhead budget calculates the budgeted overhead costs for the year and also the predetermined overhead allocation rate for the year. 
C)  The cost accountant and the production manager work together to project variable and fixed manufacturing costs. 
D)  Depreciation on manufacturing equipment is not included because the production manager has no control over that cost allocation.

Question 9

What is the cornerstone of the master budget for a merchandising company? Why?

Accepted Answer

The sales budget is the corner

Question 10

Hutchinson,Inc.provides the following data taken from its third quarter budget: $$\begin{array} { | l | r | r | r | } 
\hline &  { \text { Jul } } & { \text { Aug } } &{ \text { Sep } } \
\hline \text { Cash collections } & \$ 68,000 & \$ 34,000 & \$ 42,000 \
\hline \text { Cash payments: } & & & \
\hline \text { Purchases of direct materials } & 31,000 & 32,000 & 25,000 \
\hline \text { Operating expenses } & 11,000 & 19,000 & 20,000 \
\hline \text { Capital expenditures } & 0 & 34,000 & 7000 \
\hline
\end{array}$$ The cash balance on June 30 is projected to be $12,000.Based on the above data,calculate the shortfall the company is projected to have at the end of August.

Accepted Answer

A)  $34,000 
B)  $23,000 
C)  $13,000 
D)  $38,000 
A)  $34,000 
B)  $23,000 
C)  $13,000 
D)  $38,000

Question 11

The practice of comparing a company with its prior performance or with best practices from other companies is called ________.

Accepted Answer

A)  benchmarking 
B)  competitive analysis 
C)  differentiation analysis 
D)  budgeting 
A)  benchmarking 
B)  competitive analysis 
C)  differentiation analysis 
D)  budgeting

Question 12

When preparing the cost of goods sold budget,________.

Accepted Answer

A)  ignore balances in Finished Goods Inventory 
B)  start by calculating the projected cost to produce each unit 
C)  ignore the inventory costing method 
D)  multiply units produced by the total projected cost per unit 
A)  ignore balances in Finished Goods Inventory 
B)  start by calculating the projected cost to produce each unit 
C)  ignore the inventory costing method 
D)  multiply units produced by the total projected cost per unit

Question 13

Which of the following describes the selling and administrative expenses budget?

Accepted Answer

A)  It aids in planning to ensure the company has adequate inventory on hand. 
B)  It captures the variable and fixed components of selling and administrative expenses of the business. 
C)  It depicts the breakdown of sales based on terms of collection. 
D)  It shows the cash flows related to the selling and administrative expenses and helps in planning to ensure the business has adequate cash. 
A)  It aids in planning to ensure the company has adequate inventory on hand. 
B)  It captures the variable and fixed components of selling and administrative expenses of the business. 
C)  It depicts the breakdown of sales based on terms of collection. 
D)  It shows the cash flows related to the selling and administrative expenses and helps in planning to ensure the business has adequate cash.

Question 14

From the following details,provided by a merchandising company,prepare the selling and administrative expenses budget for the first quarter of the next year.
 $$\begin{array} { | l | l | } 
\hline \text { Rent Expense } & \$ 8,000 \text { per month } \
\hline \text { Depreciation Expense } & \$ 3,500 \text { per month } \
\hline \text { Insurance Expense } & \$ 1,250 \text { per month } \
\hline \text { Miscellaneous Expense } & 2 \% \text { of sales, paid as incurred } \
\hline \text { Commissions Expense } & 10 \% \text { of sales } \
\hline \text { Salaries Expense } & \$ 7,000 \text { per month } \
\hline
\end{array}$$ $$\begin{array} { | l | l | l | r | } 
\hline & \text { Jan } & \text { Feb } & \text { March } \
\hline \text { Sales } & \$ 50,000 & \$ 65,000 & \$ 80,000 \
\hline
\end{array}$$

Accepted Answer

The answer of From the following details,provided by a merchandising...

Question 15

For a manufacturer,the budgeted income statement ________.

Accepted Answer

A)  reports cash paid for purchases of direct materials 
B)  includes amounts from the sales, cost of goods sold, cash, and capital expenditures budgets 
C)  is accrual-based 
D)  does not include depreciation expense 
A)  reports cash paid for purchases of direct materials 
B)  includes amounts from the sales, cost of goods sold, cash, and capital expenditures budgets 
C)  is accrual-based 
D)  does not include depreciation expense

Question 16

Which of the following statements is TRUE of the operating budget?

Accepted Answer

A)  It is a part of the financial budget. 
B)  It includes the capital expenditures budget. 
C)  It includes the sales budget. 
D)  Its final component is the cash budget. 
A)  It is a part of the financial budget. 
B)  It includes the capital expenditures budget. 
C)  It includes the sales budget. 
D)  Its final component is the cash budget.

Question 17

Yoshino,Inc.,a merchandising company,has the following budgeted figures: $$\begin{array} { | l | l | c | c | c | } 
\hline &{ \text { Jan } } & \text { Feb } & \text { Mar } & \text { April } \
\hline \text { Sales } & { \$ 56,900 } & \$ 62,000 & \$ 80,000 & \$ 92,000 \
\hline \text { Cost of goods sold } & 60 \% \text { of sales } & & & \
\hline \text { Required ending inventory } & \begin{array} { l } 
\$ 15,000 + 20 \% \text { of next } \
\text { month's sales }
\end{array} & & & \
\hline \text { Inventory on hand on Jan 1 } &  { \$ 30,000 } & & & \
\hline
\end{array}$$ Calculate the ending merchandise inventory for the month of March.

Accepted Answer

A)  $33,400 
B)  $63,000 
C)  $31,540 
D)  $48,000 
A)  $33,400 
B)  $63,000 
C)  $31,540 
D)  $48,000

Question 18

All organizations use one standardized budgeting process.

Accepted Answer

A) True 
 B)False

Question 19

The most important part of a budgeting system is getting managers and employees to accept the budget.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following would not appear on a cash budget for a manufacturer?

Accepted Answer

A)  Depreciation Expense 
B)  Cash payments for direct materials purchases 
C)  Salaries paid 
D)  Utilities paid 
A)  Depreciation Expense 
B)  Cash payments for direct materials purchases 
C)  Salaries paid 
D)  Utilities paid

Exam 22: Master Budgets

The human resources manager projects the number of direct labor hours to be worked by employees.

What is a common method of accessing short-term financing?

The inventory,purchases,and cost of goods sold budget determines cost of goods sold for the budgeted income statement,and ending Merchandise Inventory for the budgeted balance sheet.

Bulldog,Inc.has budgeted sales for the first quarter of the next year to be 45,000 units.The inventory on hand at the beginning of quarter is 5000 units.The desired ending inventory is 3000 units.Calculate the budgeted production for the first quarter.

Which of the following would not appear on a multiple-step budgeted income statement for a manufacturer?

To calculate budgeted direct labor costs,multiply the number of units to be produced by the number of projected direct labor hours.Next,multiply that total by the average direct cost per hour.

For a merchandising company,what is the formula used to determine the amount of merchandise inventory to be purchased?

Which of the following statements regarding the manufacturing overhead budget is incorrect?

What is the cornerstone of the master budget for a merchandising company? Why?

The practice of comparing a company with its prior performance or with best practices from other companies is called ________.

When preparing the cost of goods sold budget,________.

Which of the following describes the selling and administrative expenses budget?

For a manufacturer,the budgeted income statement ________.

Which of the following statements is TRUE of the operating budget?

All organizations use one standardized budgeting process.

The most important part of a budgeting system is getting managers and employees to accept the budget.

Which of the following would not appear on a cash budget for a manufacturer?

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Plant Assets,natural Resources,and Intangibles

Current Liabilities and Payroll

Partnerships

Corporations

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

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