Question 1

Match the following terms with the items below:
-Performance report

Accepted Answer

A) Difference between the actual amount and the flexible budget amount 
B) A budget that specifies costs for a range of activity 
C) A budget for a particular level of activity 
D) A report that compares actual with planned costs 
E) ​Actual variable overhead − (SVOR × Actual hours) 
A) Difference between the actual amount and the flexible budget amount 
B) A budget that specifies costs for a range of activity 
C) A budget for a particular level of activity 
D) A report that compares actual with planned costs 
E) ​Actual variable overhead − (SVOR × Actual hours)

Question 2

Montgomery Company has developed the following flexible budget formulas for its four overhead items:  
   
Montgomery normally produces 15,000 units (each unit requires 0.30 direct labor hours); however, this year 19,000 units were produced with the following actual costs:

-The total budgeted overhead for an expected activity level of 10,000 units is:

Accepted Answer

A)  $139,400. 
B)  $64,400. 
C)  $124,000. 
D)  $12,400. 
E)  None of these. 
A)  $139,400. 
B)  $64,400. 
C)  $124,000. 
D)  $12,400. 
E)  None of these.

Question 3

Which of the following is an operating budget?

Accepted Answer

A)  Budgeted statement of cash flows 
B)  Capital expenditures budget 
C)  Budgeted income statement 
D)  Cash budget 
A)  Budgeted statement of cash flows 
B)  Capital expenditures budget 
C)  Budgeted income statement 
D)  Cash budget

Question 4

Yummy Jams Company produces a line of jams.Yummy's estimated production of jars of jam for the fourth quarter of the year is as follows: ?
  Each jar requires half a pound of berries.Yummy prefers to buy the freshest berries, so its policy is to have just 3% of the following month's production needs in ending inventory.On October 1, the company had 1,125 pounds of berries in inventory.Yummy's pays $0.60 per pound of berries.It buys all berries on account and typically pays 40% of a month's purchases in that month, and the remaining 60% the following month.
- How much cash is paid in November for berry purchases (rounded to the nearest dollar)?

Accepted Answer

A)  $25,258 
B)  $21,088 
C)  $28,900 
D)  $19,963 
E)  $32,212 
A)  $25,258 
B)  $21,088 
C)  $28,900 
D)  $19,963 
E)  $32,212

Question 5

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

Accepted Answer

A) Operating Budget 
B) Financial Budget 
A) Operating Budget 
B) Financial Budget

Question 6

Depreciation expense on sales equipment appears in a separate line on which of the following budgets?

Accepted Answer

A)  Cash budget 
B)  Selling and administrative expenses budget 
C)  Direct labor budget 
D)  Production budget 
E)  Overhead budget 
A)  Cash budget 
B)  Selling and administrative expenses budget 
C)  Direct labor budget 
D)  Production budget 
E)  Overhead budget

Question 7

Sully Company provided the following information for last month. ?
  
-  There were no beginning and ending inventories.What is operating income for Sully Company for last month?

Accepted Answer

A)  $24,000 
B)  $34,600 
C)  $49,400 
D)  $27,400 
E)  $41,400 
A)  $24,000 
B)  $34,600 
C)  $49,400 
D)  $27,400 
E)  $41,400

Question 8

Pallen Company estimated sales of 11,000 units at $40 each, unit cost of goods sold of $22, marketing expense of $65,000 and a 10% commission on each unit sold.Administrative expense is budgeted at $50,000.
-What is total selling expense?

Accepted Answer

A)  $65,000 
B)  $44,000 
C)  $84,000 
D)  $109,000 
E)  $39,000 
A)  $65,000 
B)  $44,000 
C)  $84,000 
D)  $109,000 
E)  $39,000

Question 9

Alpha Company makes all its sales on account.Accounts receivable payment experience is as follows:  
  Alpha provided information on sales as follows:

- What is budgeted cash to be collected on account for the month of August?

Accepted Answer

A)  $45,000 
B)  $132,000 
C)  $130,640 
D)  $150,000 
E)  $154,600 
A)  $45,000 
B)  $132,000 
C)  $130,640 
D)  $150,000 
E)  $154,600

Question 10

Comparing actual results with budgeted results on a periodic basis provides control in a budgetary system.

Accepted Answer

A) True 
 B)False

Question 11

Alpha Company makes all its sales on account.Accounts receivable payment experience is as follows:  
  Alpha provided information on sales as follows:

-How much of May's sales are expected to be uncollectible?

Accepted Answer

A)  $7,500 
B)  $5,000 
C)  $2,500 
D)  $7,200 
E)  $0 
A)  $7,500 
B)  $5,000 
C)  $2,500 
D)  $7,200 
E)  $0

Question 12

Budgets are prepared in which of the following orders?

Accepted Answer

A)  production budget, sales budget, direct labor budget 
B)  production budget, cost of goods sold budget, direct labor budget 
C)  sales budget, cash budget, production budget 
D)  sales budget, production budget, direct materials purchases budget 
E)  production budget, cash budget, direct materials purchases budget 
A)  production budget, sales budget, direct labor budget 
B)  production budget, cost of goods sold budget, direct labor budget 
C)  sales budget, cash budget, production budget 
D)  sales budget, production budget, direct materials purchases budget 
E)  production budget, cash budget, direct materials purchases budget

Question 13

Which of the following is true of budgeting?

Accepted Answer

A)  Budgeting forces management to plan for the future. 
B)  Budgeting creates a plan of action only in terms of production units. 
C)  Budgeting eradicates the need for keeping a buffer against uncertainties in demand. 
D)  Budgeting relies on the control cycle to design the planning cycle for future action. 
E)  Budgeting focuses only on long-term objectives as covered by the planning cycle. 
A)  Budgeting forces management to plan for the future. 
B)  Budgeting creates a plan of action only in terms of production units. 
C)  Budgeting eradicates the need for keeping a buffer against uncertainties in demand. 
D)  Budgeting relies on the control cycle to design the planning cycle for future action. 
E)  Budgeting focuses only on long-term objectives as covered by the planning cycle.

Question 14

Wright & Boyle Company budgeted the following production in units for the second quarter of the year:  
   Each unit requires five pounds of raw material.Wright & Boyle's policy is to have 20% of the following month's production needs for materials in inventory.This policy was met in March.Raw materials purchases budgeted for May in pounds equal:

Accepted Answer

A)  219,000 pounds. 
B)  202,400 pounds. 
C)  45,600 pounds. 
D)  171,600 pounds. 
E)  225,600 pounds. 
A)  219,000 pounds. 
B)  202,400 pounds. 
C)  45,600 pounds. 
D)  171,600 pounds. 
E)  225,600 pounds.

Question 15

Movers Company manufactures sneakers.The production of their new sneaker for the coming three months is budgeted as follows: 
  Each sneaker requires 2 hours of direct labor time.Direct labor wages average $15 per hour.Monthly overhead averages $10 per direct labor hour plus fixed overhead of $4,500.What is the direct labor cost budgeted for September?

Accepted Answer

A)  $820,000 
B)  $750,000 
C)  $1,400,000 
D)  $1,500,000 
E)  $625,000 
A)  $820,000 
B)  $750,000 
C)  $1,400,000 
D)  $1,500,000 
E)  $625,000

Question 16

The __________________ shows the expected cost of all production costs other than direct materials and direct labor.

Accepted Answer

The answer of The __________________ shows the expected cost of...

Question 17

A continuous budget is a moving 12-month budget.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is true of flexible budgets?

Accepted Answer

A)  They serve only the control needs of management of an organization. 
B)  They enable firms to compute expected costs for a range of activity levels. 
C)  They allow managers to develop financial results for only one potential scenario. 
D)  They do not require the managers to know the cost behavior pattern of each item in the budget. 
E)  All of these are correct. 
A)  They serve only the control needs of management of an organization. 
B)  They enable firms to compute expected costs for a range of activity levels. 
C)  They allow managers to develop financial results for only one potential scenario. 
D)  They do not require the managers to know the cost behavior pattern of each item in the budget. 
E)  All of these are correct.

Question 19

A static budget is a budget for a particular level of activity.

Accepted Answer

A) True 
 B)False

Question 20

Identify each item as a component of the production budget or the direct materials purchases budget.
-units of raw materials needed for each unit of product

Accepted Answer

A) production budget 
B) direct materials purchases budget 
A) production budget 
B) direct materials purchases budget

Match the following terms with the items below: -Performance report

Which of the following is an operating budget?

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

Depreciation expense on sales equipment appears in a separate line on which of the following budgets?

Sully Company provided the following information for last month. ? - There were no beginning and ending inventories.What is operating income for Sully Company for last month?

Pallen Company estimated sales of 11,000 units at $40 each, unit cost of goods sold of $22, marketing expense of $65,000 and a 10% commission on each unit sold.Administrative expense is budgeted at $50,000. -What is total selling expense?

Alpha Company makes all its sales on account.Accounts receivable payment experience is as follows: Alpha provided information on sales as follows: - What is budgeted cash to be collected on account for the month of August?

Comparing actual results with budgeted results on a periodic basis provides control in a budgetary system.

Alpha Company makes all its sales on account.Accounts receivable payment experience is as follows: Alpha provided information on sales as follows: -How much of May's sales are expected to be uncollectible?

Budgets are prepared in which of the following orders?

Which of the following is true of budgeting?

The __________________ shows the expected cost of all production costs other than direct materials and direct labor.

A continuous budget is a moving 12-month budget.

Which of the following is true of flexible budgets?

A static budget is a budget for a particular level of activity.

Identify each item as a component of the production budget or the direct materials purchases budget. -units of raw materials needed for each unit of product

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

Match the following terms with the items below: -Performance report

Which of the following is an operating budget?

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

Depreciation expense on sales equipment appears in a separate line on which of the following budgets?

Sully Company provided the following information for last month. ? - There were no beginning and ending inventories.What is operating income for Sully Company for last month?

Pallen Company estimated sales of 11,000 units at $40 each, unit cost of goods sold of $22, marketing expense of $65,000 and a 10% commission on each unit sold.Administrative expense is budgeted at $50,000. -What is total selling expense?

Alpha Company makes all its sales on account.Accounts receivable payment experience is as follows: Alpha provided information on sales as follows: - What is budgeted cash to be collected on account for the month of August?

Comparing actual results with budgeted results on a periodic basis provides control in a budgetary system.

Alpha Company makes all its sales on account.Accounts receivable payment experience is as follows: Alpha provided information on sales as follows: -How much of May's sales are expected to be uncollectible?

Budgets are prepared in which of the following orders?

Which of the following is true of budgeting?

The __________________ shows the expected cost of all production costs other than direct materials and direct labor.

A continuous budget is a moving 12-month budget.

Which of the following is true of flexible budgets?

A static budget is a budget for a particular level of activity.

Identify each item as a component of the production budget or the direct materials purchases budget. -units of raw materials needed for each unit of product

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