Question 1

What occurs when a manager deliberately underestimates revenues or overestimates costs?

Accepted Answer

A)  budgetary slack 
B)  goal congruence 
C)  pseudoparticipation 
D)  setting standards too high 
A)  budgetary slack 
B)  goal congruence 
C)  pseudoparticipation 
D)  setting standards too high

Question 2

Identify each item as either part of the operating budget or the financial budget.
-Ending finished goods inventory budget

Accepted Answer

A) Operating budget 
B) Financial budget 
A) Operating budget 
B) Financial budget

Question 3

What are the advantages of budgeting?

Accepted Answer

There are several advantages of budgetin

Question 4

The controller usually serves as the budget director to review the budget, provide policy guidelines and budgetary goals, resolve differences that arise as the budget is prepared, approve the final budget, and monitor the actual performance of the organization as the year unfolds.

Accepted Answer

A) True 
 B)False

Question 5

What is NOT a characteristic of the master budget?

Accepted Answer

A)  The sales forecast is prepared before the sales budget. 
B)  The production budget is prepared in units and dollars. 
C)  One approach to forecasting sales is the bottom-up approach. 
D)  The master budget is the comprehensive plan for the organization as a whole. 
A)  The sales forecast is prepared before the sales budget. 
B)  The production budget is prepared in units and dollars. 
C)  One approach to forecasting sales is the bottom-up approach. 
D)  The master budget is the comprehensive plan for the organization as a whole.

Question 6

Which of the following is classified as an operating budget?

Accepted Answer

A)  the cash budget 
B)  the budgeted income statement 
C)  the capital expenditures budget 
D)  the budgeted statement of cash flows 
A)  the cash budget 
B)  the budgeted income statement 
C)  the capital expenditures budget 
D)  the budgeted statement of cash flows

Question 7

Which statement best describes a use of budgets for control purposes?

Accepted Answer

A)  Communication is improved. 
B)  Plans can be made for the future. 
C)  Budgets set a standard against which results can be compared. 
D)  If conditions change between the formation of the budget and the current time, budgets can be quickly adapted. 
A)  Communication is improved. 
B)  Plans can be made for the future. 
C)  Budgets set a standard against which results can be compared. 
D)  If conditions change between the formation of the budget and the current time, budgets can be quickly adapted.

Question 8

Long & Short Company developed the following data for the month of June.
1 June 1 cash balance $2,300.
2 Cash sales in June $67,000.
3 Credit sales for June are $20,000; for May $10,000; and for April $16,000. Credit sales are collected as follows: 60% in the month of sale, 20% in the following month, and 10% in the second month following the sale.
4 Purchases for May were $34,000 and for June are $40,000. Half of purchases are paid in the month of purchase and the remainder in the following month.
5 June salaries are $28,400, utilities are $1,090, and depreciation on the building is $1,000.
Required:
A. Calculate the anticipated cash receipts from accounts receivable in June.
B. Calculate the anticipated total cash available in June.
C. Calculate the June cash payments for purchases.
D. Calculate the anticipated cash balance on June 30.

Accepted Answer

A. Anticipated cash receipts from accoun

Question 9

Budgets can be used to improve decision making.

Accepted Answer

A) True 
 B)False

Question 10

Refer to Southern Inc. How much cash will be paid in August for pepper purchases (rounded to the nearest dollar)?

Accepted Answer

A)  $8,435 
B)  $8,900 
C)  $9,963 
D)  $21,088 
A)  $8,435 
B)  $8,900 
C)  $9,963 
D)  $21,088

Question 11

Identify each item as a component of one of the following budgets.* Each option may be used more than once, and it is possible that one or more of the options may not be used at all.
-Beginning finished goods inventory

Accepted Answer

A) Production budget 
B) Direct materials purchases budget 
C) Sales budget 
D) Production budget and Direct materials purchases budget 
E) Production budget and Sales budget
F)Direct materials purchases budget and Sales budget
G)Product budget, Direct materials purchases budget, and Sales budget 
A) Production budget 
B) Direct materials purchases budget 
C) Sales budget 
D) Production budget and Direct materials purchases budget 
E) Production budget and Sales budget
F)Direct materials purchases budget and Sales budget
G)Product budget, Direct materials purchases budget, and Sales budget

Question 12

What budgets are needed to calculate a budgeted unit cost?

Accepted Answer

A)  budgeted income statement, direct labour budget, and cash budget 
B)  direct materials purchases budget, direct labour budget, and manufacturing overhead budget 
C)  budgeted balance sheet, selling and administration budget, and finished goods inventory budget 
D)  direct materials purchases budget, selling and administration budget, finished goods inventory budget 
A)  budgeted income statement, direct labour budget, and cash budget 
B)  direct materials purchases budget, direct labour budget, and manufacturing overhead budget 
C)  budgeted balance sheet, selling and administration budget, and finished goods inventory budget 
D)  direct materials purchases budget, selling and administration budget, finished goods inventory budget

Question 13

Which budget would likely be most important to bank loan officers when determining whether to give a company a loan?

Accepted Answer

A)  cash budget 
B)  sales budget 
C)  budgeted income statement 
D)  budgeted balance sheet 
A)  cash budget 
B)  sales budget 
C)  budgeted income statement 
D)  budgeted balance sheet

Question 14

A company provided the following information on its projected sales for the coming year: $\begin{array}{lllll}&\text { 1st Ouarter}&\text {2nd Ouarter }&\text {3rd Ouarter}&\text { 4th Ouarter }\
\text { Units } & 50,000 & 40,000 & 30,000 & 80,000 \
\text { Average selling price } & \$ 5 & \$ 5 & \$ 5 & \$ 6
\end{array}$ Assume that the beginning finished goods inventory is 5,000 units, and that the company policy is to have 25% of the next quarter's sales in ending finished goods inventory. Which quarter will have the lowest production?

Accepted Answer

A)  Quarter 1 
B)  Quarter 2 
C)  Quarter 3 
D)  Quarter 4 
A)  Quarter 1 
B)  Quarter 2 
C)  Quarter 3 
D)  Quarter 4

Question 15

Lube-Fast provides oil changes and lubes. The estimated number of oil changes for April and May are 3,600 and 4,000. Each oil change takes 12 minutes of direct labour. The wage rate is $10 per hour. Manufacturing overhead is $3,700 per month and $2 per oil change.
Required:
A. Calculate the budgeted direct labour for April.
B. Calculate the budgeted direct labour for May.
C. Calculate the budgeted manufacturing overhead for April.
D. Calculate the budgeted manufacturing overhead for May.

Accepted Answer

A. Budgeted direct labour for April = $7

Question 16

What would be included in the selling and administrative expenses budget?

Accepted Answer

A)  cost of goods sold 
B)  manufacturing overhead 
C)  fixed production expense 
D)  variable cost of commissions 
A)  cost of goods sold 
B)  manufacturing overhead 
C)  fixed production expense 
D)  variable cost of commissions

Question 17

What is a result of participative budgeting?

Accepted Answer

A)  goal congruence 
B)  pseudoparticipation 
C)  slack built into the budget 
D)  set goals that are either too high or too low 
A)  goal congruence 
B)  pseudoparticipation 
C)  slack built into the budget 
D)  set goals that are either too high or too low

Question 18

Identify each item as either part of the operating budget or the financial budget.
-Cash budget

Accepted Answer

A) Operating budget 
B) Financial budget 
A) Operating budget 
B) Financial budget

Question 19

What does traditional organization theory use to motivate workers?

Accepted Answer

A)  bonuses 
B)  self-esteem 
C)  increased responsibility 
D)  the nature of the work itself 
A)  bonuses 
B)  self-esteem 
C)  increased responsibility 
D)  the nature of the work itself

Question 20

Bingimton Company
Bingimton Company provided the following information for last month. $$\begin{array} { l r } 
\text { Production in units } & 1,000 \
\text { Direct materials cost } & \$ 3,000 \
\text { Direct labour cost } & \$ 4,000 \
\text { Manufacturing overhead cost } & \$ 7,600 \
\text { Sales commission per unit sold } & \$ 2 \
\text { Price per unit sold } & \$ 24 \
\text { Fixed selling and administrative expense } & \$ 5,000
\end{array}$$ There were no beginning and ending inventories.
-Refer to Southern Inc. What is the cost in dollars of purchases for July?

Accepted Answer

A)  $7,970 
B)  $8,450 
C)  $19,925 
D)  $33,320 
A)  $7,970 
B)  $8,450 
C)  $19,925 
D)  $33,320

What occurs when a manager deliberately underestimates revenues or overestimates costs?

Identify each item as either part of the operating budget or the financial budget. -Ending finished goods inventory budget

What are the advantages of budgeting?

The controller usually serves as the budget director to review the budget, provide policy guidelines and budgetary goals, resolve differences that arise as the budget is prepared, approve the final budget, and monitor the actual performance of the organization as the year unfolds.

What is NOT a characteristic of the master budget?

Which of the following is classified as an operating budget?

Which statement best describes a use of budgets for control purposes?

Budgets can be used to improve decision making.

Refer to Southern Inc. How much cash will be paid in August for pepper purchases (rounded to the nearest dollar)?

Identify each item as a component of one of the following budgets.* Each option may be used more than once, and it is possible that one or more of the options may not be used at all. -Beginning finished goods inventory

What budgets are needed to calculate a budgeted unit cost?

Which budget would likely be most important to bank loan officers when determining whether to give a company a loan?

What would be included in the selling and administrative expenses budget?

What is a result of participative budgeting?

Identify each item as either part of the operating budget or the financial budget. -Cash budget

What does traditional organization theory use to motivate workers?

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behaviour

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing, and Inventory Management

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Filters

Exam 9: Budgeting, Production, Cash, and Master Budget

What occurs when a manager deliberately underestimates revenues or overestimates costs?

Identify each item as either part of the operating budget or the financial budget. -Ending finished goods inventory budget

What are the advantages of budgeting?

The controller usually serves as the budget director to review the budget, provide policy guidelines and budgetary goals, resolve differences that arise as the budget is prepared, approve the final budget, and monitor the actual performance of the organization as the year unfolds.

What is NOT a characteristic of the master budget?

Which of the following is classified as an operating budget?

Which statement best describes a use of budgets for control purposes?

Budgets can be used to improve decision making.

Refer to Southern Inc. How much cash will be paid in August for pepper purchases (rounded to the nearest dollar)?

Identify each item as a component of one of the following budgets.* Each option may be used more than once, and it is possible that one or more of the options may not be used at all. -Beginning finished goods inventory

What budgets are needed to calculate a budgeted unit cost?

Which budget would likely be most important to bank loan officers when determining whether to give a company a loan?

What would be included in the selling and administrative expenses budget?

What is a result of participative budgeting?

Identify each item as either part of the operating budget or the financial budget. -Cash budget

What does traditional organization theory use to motivate workers?

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behaviour

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing, and Inventory Management

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Filters