Question 1

To create a meaningful performance report,

Accepted Answer

A)  actual costs are compared with the expected costs found in the static budget. 
B)  actual costs are calculated as a percentage of sales. 
C)  actual costs are compared with the prior year's actual costs. 
D)  expected costs of the static budget are compared with the expected costs of the flexible budget. 
E)  actual costs are compared with the expected costs at the same level of activity. 
A)  actual costs are compared with the expected costs found in the static budget. 
B)  actual costs are calculated as a percentage of sales. 
C)  actual costs are compared with the prior year's actual costs. 
D)  expected costs of the static budget are compared with the expected costs of the flexible budget. 
E)  actual costs are compared with the expected costs at the same level of activity. E

Question 2

Monetary incentives include salary increases, bonuses, and promotions.

Accepted Answer

A) True 
 B)False  True

Question 3

Matching
Identify each item as an advantage or disadvantage of budgeting.
-leads to budgetary slack

Accepted Answer

A) advantage 
B) disadvantage 
A) advantage 
B) disadvantage B

Question 4

Myopic behavior is one of the advantages of participative budgeting.

Accepted Answer

A) True 
 B)False

Question 5

Budgets are financial plans for the future.

Accepted Answer

A) True 
 B)False

Question 6

The first step in creating the master budget is the creation of the

Accepted Answer

A)  production budget. 
B)  direct labor budget. 
C)  cash budget. 
D)  sales budget. 
E)  budgeted income statement. 
A)  production budget. 
B)  direct labor budget. 
C)  cash budget. 
D)  sales budget. 
E)  budgeted income statement.

Question 7

Which of the following formulas is used to compute the units to be produced?

Accepted Answer

A)  Units to Be Produced = Expected Unit Sales - Units in Desired Ending Inventory 
B)  Units to Be Produced = Units in Beginning Inventory + Units in Ending Inventory 
C)  Units to Be Produced = Units in Desired Ending Inventory + Units in Beginning Inventory - Units in Ending Inventory 
D)  Units to Be Produced = Expected Unit Sales + Units in Desired Ending Inventory - Units in Beginning Inventory 
A)  Units to Be Produced = Expected Unit Sales - Units in Desired Ending Inventory 
B)  Units to Be Produced = Units in Beginning Inventory + Units in Ending Inventory 
C)  Units to Be Produced = Units in Desired Ending Inventory + Units in Beginning Inventory - Units in Ending Inventory 
D)  Units to Be Produced = Expected Unit Sales + Units in Desired Ending Inventory - Units in Beginning Inventory

Question 8

In going from the sales budget to the production budget, adjustments to the sales budget need to be made for

Accepted Answer

A)  finished goods inventories. 
B)  cash receipts. 
C)  factory overhead costs. 
D)  selling expenses. 
A)  finished goods inventories. 
B)  cash receipts. 
C)  factory overhead costs. 
D)  selling expenses.

Question 9

A strategic plan identifies strategies for future activities and operations, generally covering at least five years.

Accepted Answer

A) True 
 B)False

Question 10

A company requires 220 pounds of plastic to meet the production needs of a product.It currently has 25 pounds of plastic inventory.The desired ending inventory of plastic is 70 pounds.How many pounds of plastic should be budgeted for purchasing during the coming period?

Accepted Answer

A)  195 pounds 
B)  265 pounds 
C)  245 pounds 
D)  290 pounds 
E)  175 pounds 
A)  195 pounds 
B)  265 pounds 
C)  245 pounds 
D)  290 pounds 
E)  175 pounds

Question 11

Pseudoparticipation is one of the potential problems with participative budgeting.

Accepted Answer

A) True 
 B)False

Question 12

Tangerine Inc.produces plastic grocery bags.Tangerine has developed a static budget for the month of July based on 9,000 direct labor hours.During the quarter, the actual activity was 10,000 direct labor hours.Data for July are summarized as follows: ​
​
  ​
Comparing the static budget to the actual costs, we can conclude that:

Accepted Answer

A)  direct materials variance is favorable. 
B)  power variance is unfavorable. 
C)  the plant manager was clearly not efficient. 
D)  the plant manager should be dismissed. 
E)  None of these are correct. 
A)  direct materials variance is favorable. 
B)  power variance is unfavorable. 
C)  the plant manager was clearly not efficient. 
D)  the plant manager should be dismissed. 
E)  None of these are correct.

Question 13

The direct materials purchases budget is based on the sales budget.

Accepted Answer

A) True 
 B)False

Question 14

Budgets should be based on ideal standards to encourage everyone to reach for the highest level of performance.

Accepted Answer

A) True 
 B)False

Question 15

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 16

____________________ is individual behavior that is in basic conflict with the goals of the organization.

Accepted Answer

Dysfunctio

Question 17

Which of the following is true of a continuous budget?

Accepted Answer

A)  It forces managers to plan ahead constantly. 
B)  It is broken down into quarterly and monthly budgets. 
C)  It rules out the comparison of actual data with budgeted data. 
D)  It is a quarterly budget used only by manufacturing firms. 
E)  It is a moving 6-month budget. 
A)  It forces managers to plan ahead constantly. 
B)  It is broken down into quarterly and monthly budgets. 
C)  It rules out the comparison of actual data with budgeted data. 
D)  It is a quarterly budget used only by manufacturing firms. 
E)  It is a moving 6-month budget.

Question 18

Cash budgets are often prepared monthly or even weekly.

Accepted Answer

A) True 
 B)False

Question 19

Thomas & Cooke Corporation has the following sales forecasts for the first three months of the current year:   
  85% of sales are collected in the month of the sale and the remainder is collected in the following month.
 
   What is the cash balance at the end of January, assuming that cash is received only from customers and that $50,000 is paid out during January?

Accepted Answer

A)  $39,400 
B)  $33,950 
C)  $20,600 
D)  $21,000 
A)  $39,400 
B)  $33,950 
C)  $20,600 
D)  $21,000

Question 20

Often, the flexible budget formulas are based on ________________ instead of units.

Accepted Answer

The answer of Often, the flexible budget formulas are based...

To create a meaningful performance report,

Monetary incentives include salary increases, bonuses, and promotions.

Matching Identify each item as an advantage or disadvantage of budgeting. -leads to budgetary slack

Myopic behavior is one of the advantages of participative budgeting.

Budgets are financial plans for the future.

The first step in creating the master budget is the creation of the

Which of the following formulas is used to compute the units to be produced?

In going from the sales budget to the production budget, adjustments to the sales budget need to be made for

A strategic plan identifies strategies for future activities and operations, generally covering at least five years.

A company requires 220 pounds of plastic to meet the production needs of a product.It currently has 25 pounds of plastic inventory.The desired ending inventory of plastic is 70 pounds.How many pounds of plastic should be budgeted for purchasing during the coming period?

Pseudoparticipation is one of the potential problems with participative budgeting.

The direct materials purchases budget is based on the sales budget.

Budgets should be based on ideal standards to encourage everyone to reach for the highest level of performance.

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

____________________ is individual behavior that is in basic conflict with the goals of the organization.

Which of the following is true of a continuous budget?

Cash budgets are often prepared monthly or even weekly.

Often, the flexible budget formulas are based on ________________ instead of units.

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior, Cost Forecasting, and Segmented Income Statements

Job-Order Costing and Normal Cost Overhead Application

Activity-Based Costing and Management

Process Costing

Cost-Volume-Profit Analysis

Tactical Decision-Making and Relevant Costing

Standard Costing and Variance Analysis

Performance Evaluation and Decentralization

Capital Investment Decisions

Emerging Topics in Managerial Accounting: Sustainability, Quality Cost, Lean Accounting, International Issues, Enterprise Risk Management, the Managerial Accountant in Forensicfraud Accounting

Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 9: Profit Planning and Flexible Budgets

To create a meaningful performance report,

Monetary incentives include salary increases, bonuses, and promotions.

Matching Identify each item as an advantage or disadvantage of budgeting. -leads to budgetary slack

Myopic behavior is one of the advantages of participative budgeting.

Budgets are financial plans for the future.

The first step in creating the master budget is the creation of the

Which of the following formulas is used to compute the units to be produced?

In going from the sales budget to the production budget, adjustments to the sales budget need to be made for

A strategic plan identifies strategies for future activities and operations, generally covering at least five years.

A company requires 220 pounds of plastic to meet the production needs of a product.It currently has 25 pounds of plastic inventory.The desired ending inventory of plastic is 70 pounds.How many pounds of plastic should be budgeted for purchasing during the coming period?

Pseudoparticipation is one of the potential problems with participative budgeting.

The direct materials purchases budget is based on the sales budget.

Budgets should be based on ideal standards to encourage everyone to reach for the highest level of performance.

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

____________________ is individual behavior that is in basic conflict with the goals of the organization.

Which of the following is true of a continuous budget?

Cash budgets are often prepared monthly or even weekly.

Often, the flexible budget formulas are based on ________________ instead of units.

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior, Cost Forecasting, and Segmented Income Statements

Job-Order Costing and Normal Cost Overhead Application

Activity-Based Costing and Management

Process Costing

Cost-Volume-Profit Analysis

Tactical Decision-Making and Relevant Costing

Standard Costing and Variance Analysis

Performance Evaluation and Decentralization

Capital Investment Decisions

Emerging Topics in Managerial Accounting: Sustainability, Quality Cost, Lean Accounting, International Issues, Enterprise Risk Management, the Managerial Accountant in Forensicfraud Accounting

Statement of Cash Flows

Financial Statement Analysis

Filters