Question 1

Which statement best describes a characteristic of budgets?

Accepted Answer

A)  They reflect on financial plans of the past. 
B)  They are created once during the life of the business. 
C)  They are key components of recording a financial history. 
D)  They are identifiers of objectives and the actions needed to achieve them. 
A)  They reflect on financial plans of the past. 
B)  They are created once during the life of the business. 
C)  They are key components of recording a financial history. 
D)  They are identifiers of objectives and the actions needed to achieve them.

Question 2

Is budgeting relevant for not-for-profit organizations? Explain your position.

Accepted Answer

All entities need to use the formal budg

Question 3

Identify each item as either part of the operating budget or the financial budget.
-Budgeted capital expenditures

Accepted Answer

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

Question 4

Identify each item as an advantage or disadvantage of budgeting.
-Provides standard for performance evaluation

Accepted Answer

A) Advantage 
B) Disadvantage 
A) Advantage 
B) Disadvantage

Question 5

Bright Lights Company manufactures lamps. The estimated lamp sales for the last three months of the current year are as follows: Month Sales
October 10,000
November 13,000
December 15,000
Finished goods inventory at the end of September was 3,000 units. Ending finished goods inventory is budgeted to equal 25% of the next month's sales. The company expects to sell the lamps for $25 each. The first three months of the next year's sales are projected at 16,000 lamps. How many lamps should be produced in November?

Accepted Answer

A)  10,500 lamps 
B)  11,000 lamps 
C)  13,500 lamps 
D)  14,000 lamps 
A)  10,500 lamps 
B)  11,000 lamps 
C)  13,500 lamps 
D)  14,000 lamps

Question 6

The budget director is the person responsible for directing and coordinating the organization's overall budgeting process.

Accepted Answer

A) True 
 B)False

Question 7

A company expects the following sales for the coming year: $\begin{array}{lllll}&\text { 1st Ouarter}&\text {2nd Ouarter }&\text {3rd Ouarter}&\text { 4th Ouarter }\
\text { Units } & 50,000 & 40,000 & 30,000 & 90,000 \
\text { Average selling price } & \$ 5 & \$ 4.50 & \$ 5 & \$ 6
\end{array}$ What is the company's budgeted sales revenue for the year?

Accepted Answer

A)  $1,050,000 
B)  $1,120,000 
C)  $1,155,000 
D)  $1,260,000 
A)  $1,050,000 
B)  $1,120,000 
C)  $1,155,000 
D)  $1,260,000

Question 8

Briefly describe the advantages and disadvantages of using budgeting for performance evaluation?

Accepted Answer

Budgets are often used to judge the perf

Question 9

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.
-Sales in units

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 10

Refer to Emerald Company. What was the ending direct materials inventory for January?

Accepted Answer

A)  3,000 kg 
B)  4,000 kg 
C)  6,000 kg 
D)  12,000 kg 
A)  3,000 kg 
B)  4,000 kg 
C)  6,000 kg 
D)  12,000 kg

Question 11

What is the alignment of managerial and organizational goals?

Accepted Answer

A)  goal feedback 
B)  goal congruence 
C)  goal participation 
D)  goal pseudoparticipation 
A)  goal feedback 
B)  goal congruence 
C)  goal participation 
D)  goal pseudoparticipation

Question 12

BCB Company budgeted production of 250,000 units for June, 240,000 units for July, and 350,000 units for August. Each unit requires 0.35 direct labour hours. How many direct labour hours are budgeted for August?

Accepted Answer

A)  5,000 
B)  50,000 
C)  52,500 
D)  122,500 
A)  5,000 
B)  50,000 
C)  52,500 
D)  122,500

Question 13

Describe some problems with participative budgeting.

Accepted Answer

Some potential problems are:
1) Standard

Question 14

Fredder Company usually sells about 20% of its merchandise during a month for cash with the remaining sales on account. The company's accounts receivable payment history is as follows: 30% in the month of sale, 50% in the month following, and 15% in the second month following sale. Total budgeted sales for the second quarter are as follows:
April $100,000
May 120,000
June 80,000
Assume all questions relate to the month of June.
Required:
A. Calculate the expected cash sales.
B. Calculate the expected receipts from accounts receivable for sales made in April.
C. Calculate the expected receipts from accounts receivable for sales made in May.
D. Calculate the total expected cash receipts.
E. From the above accounts receivable history information, receipts from accounts receivable do not equal 100%. Why not? Does this amount appear on the cash budget?

Accepted Answer

A. June cash sales = $80,000 × 20% = $16

Question 15

Chatters Salons anticipates giving 104 permanents in May, 140 in June, and 130 in July. The company needs one permanent wave kit for each perm, along with two boxes of wave tissues. Its inventory policy is to have 10% of the following month's direct materials needs on hand. On May 1, there were 18 wave kits and five boxes of wave tissues on hand. (Round any fractions of a unit to the nearest whole unit.)
Required:
A. How many wave kits should be purchased in May?
B. How many wave kits should be purchased in June?
C. How many boxes of tissues should be purchased in May?
D. How many boxes of tissues should be purchased in June?

Accepted Answer

A. May wave kit purchases = 100
[100 = 1

Question 16

Refer to Bortolli Company. What is the total manufacturing overhead budgeted for the month of June?

Accepted Answer

A)  $42,100 
B)  $80,000 
C)  $92,100 
D)  $160,000 
A)  $42,100 
B)  $80,000 
C)  $92,100 
D)  $160,000

Question 17

Which of the following is an example of myopic behaviour?

Accepted Answer

A)  promotion of deserving employees 
B)  productivity training for new employees 
C)  increased spending on research and development 
D)  reducing expenditures on preventive maintenance 
A)  promotion of deserving employees 
B)  productivity training for new employees 
C)  increased spending on research and development 
D)  reducing expenditures on preventive maintenance

Question 18

Which statement reflects the calculation for the direct materials needed for production?

Accepted Answer

A)  Add units to be produced to direct materials per unit. 
B)  Divide units to be produced by direct materials per unit. 
C)  Multiply units to be produced by direct materials per unit. 
D)  Subtract units to be produced from direct materials per unit. 
A)  Add units to be produced to direct materials per unit. 
B)  Divide units to be produced by direct materials per unit. 
C)  Multiply units to be produced by direct materials per unit. 
D)  Subtract units to be produced from direct materials per unit.

Question 19

Which statement best describes a characteristic of the master budget?

Accepted Answer

A)  It is divided into daily and weekly budgets. 
B)  It is created externally and imposed on management. 
C)  It provides a selective financial plan for the organization as a whole. 
D)  It is typically for a 1-year period corresponding to the fiscal year of the company. 
A)  It is divided into daily and weekly budgets. 
B)  It is created externally and imposed on management. 
C)  It provides a selective financial plan for the organization as a whole. 
D)  It is typically for a 1-year period corresponding to the fiscal year of the company.

Question 20

$$\begin{array} { l l } 
\text { May } & \$ 100,000 \
\text { June } & \$ 120,000 \
\text { July } & \$ 130,000 \
\text { August (expected) } & \$ 150,000
\end{array}$$
-Refer to Miso Compayny. What dollar value of June credit sales is expected to be collected in July?

Accepted Answer

A)  $30,000 
B)  $36,000 
C)  $60,000 
D)  $72,000 
A)  $30,000 
B)  $36,000 
C)  $60,000 
D)  $72,000

Which statement best describes a characteristic of budgets?

Is budgeting relevant for not-for-profit organizations? Explain your position.

Identify each item as either part of the operating budget or the financial budget. -Budgeted capital expenditures

Identify each item as an advantage or disadvantage of budgeting. -Provides standard for performance evaluation

The budget director is the person responsible for directing and coordinating the organization's overall budgeting process.

A company expects the following sales for the coming year: 1st Ouarter 2nd Ouarter 3rd Ouarter 4th Ouarter Units 50,000 40,000 30,000 90,000 Average selling price \ 5 \ 4.50 \ 5 \ 6 What is the company's budgeted sales revenue for the year?

Briefly describe the advantages and disadvantages of using budgeting for performance evaluation?

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. -Sales in units

Refer to Emerald Company. What was the ending direct materials inventory for January?

What is the alignment of managerial and organizational goals?

BCB Company budgeted production of 250,000 units for June, 240,000 units for July, and 350,000 units for August. Each unit requires 0.35 direct labour hours. How many direct labour hours are budgeted for August?

Describe some problems with participative budgeting.

Refer to Bortolli Company. What is the total manufacturing overhead budgeted for the month of June?

Which of the following is an example of myopic behaviour?

Which statement reflects the calculation for the direct materials needed for production?

Which statement best describes a characteristic of the master budget?

May \ 100,000 June \ 120,000 July \ 130,000 August (expected) \ 150,000 -Refer to Miso Compayny. What dollar value of June credit sales is expected to be collected in July?

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

Which statement best describes a characteristic of budgets?

Is budgeting relevant for not-for-profit organizations? Explain your position.

Identify each item as either part of the operating budget or the financial budget. -Budgeted capital expenditures

Identify each item as an advantage or disadvantage of budgeting. -Provides standard for performance evaluation

The budget director is the person responsible for directing and coordinating the organization's overall budgeting process.

A company expects the following sales for the coming year: 1st Ouarter 2nd Ouarter 3rd Ouarter 4th Ouarter Units 50,000 40,000 30,000 90,000 Average selling price \ 5 \ 4.50 \ 5 \ 6 What is the company's budgeted sales revenue for the year?

Briefly describe the advantages and disadvantages of using budgeting for performance evaluation?

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. -Sales in units

Refer to Emerald Company. What was the ending direct materials inventory for January?

What is the alignment of managerial and organizational goals?

BCB Company budgeted production of 250,000 units for June, 240,000 units for July, and 350,000 units for August. Each unit requires 0.35 direct labour hours. How many direct labour hours are budgeted for August?

Describe some problems with participative budgeting.

Refer to Bortolli Company. What is the total manufacturing overhead budgeted for the month of June?

Which of the following is an example of myopic behaviour?

Which statement reflects the calculation for the direct materials needed for production?

Which statement best describes a characteristic of the master budget?

May \ 100,000 June \ 120,000 July \ 130,000 August (expected) \ 150,000 -Refer to Miso Compayny. What dollar value of June credit sales is expected to be collected in July?

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