Question 1

A company's planned borrowings and repayments appear on the

Accepted Answer

A)  production budget. 
B)  selling and administrative expenses budget. 
C)  interest income budget. 
D)  cash budget. 
E)  operating budget. 
A)  production budget. 
B)  selling and administrative expenses budget. 
C)  interest income budget. 
D)  cash budget. 
E)  operating budget.

Question 2

Bank loan officers would find which of the following budgets to be one of the most important in determining whether or not to give a company a loan?

Accepted Answer

A)  Sales budget 
B)  Production budget 
C)  Budgeted income statement 
D)  Budgeted balance sheet 
E)  Cash budget 
A)  Sales budget 
B)  Production budget 
C)  Budgeted income statement 
D)  Budgeted balance sheet 
E)  Cash budget

Question 3

Workshape Company budgeted 250,000 units of production for June, 260,000 units for July, and 320,000 units for August.Each unit requires 0.30 direct labor hours.How many direct labor hours are budgeted for August?

Accepted Answer

A)  50,000 direct labor hours 
B)  5,000 direct labor hours 
C)  96,000 direct labor hours 
D)  52,500 direct labor hours 
E)  300,000 direct labor hours 
A)  50,000 direct labor hours 
B)  5,000 direct labor hours 
C)  96,000 direct labor hours 
D)  52,500 direct labor hours 
E)  300,000 direct labor hours

Question 4

Before-the-fact flexible budgets give expected outcomes for a range of activity levels.

Accepted Answer

A) True 
 B)False

Question 5

An after-the-fact flexible budget allows managers to generate financial results from a number of potential scenarios.

Accepted Answer

A) True 
 B)False

Question 6

The master budget is typically a comprehensive financial plan for the organization for the past fiscal year.

Accepted Answer

A) True 
 B)False

Question 7

In preparing the direct labor budget, the average wage rate is used to calculate total direct labor cost.

Accepted Answer

A) True 
 B)False

Question 8

A firm should develop a strategic plan before preparing a budget.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following budgets can be used for control?

Accepted Answer

A)  Production budget 
B)  Cash budget 
C)  Budgeted income statement 
D)  Selling and administrative expense budget 
E)  All of these 
A)  Production budget 
B)  Cash budget 
C)  Budgeted income statement 
D)  Selling and administrative expense budget 
E)  All of these

Question 10

The cash budget and budgeted balance sheet are part of the ________________.

Accepted Answer

The answer of The cash budget and budgeted balance sheet...

Question 11

Budgets identify objectives and the actions needed to achieve them because they are foresighted financial plans.

Accepted Answer

A) True 
 B)False

Question 12

A company has had stable sales and production for several years.Next year, sales are expected to increase by at least 50%.Assuming that the company maintains its policy for desired ending inventories of finished product and direct materials purchases, what will be the likely effect on the desired ending inventory of finished product?

Accepted Answer

A)  It will increase 
B)  It will decrease 
C)  It will stay the same 
D)  It will be twice the size of the desired ending inventory of raw materials 
E)  None of these 
A)  It will increase 
B)  It will decrease 
C)  It will stay the same 
D)  It will be twice the size of the desired ending inventory of raw materials 
E)  None of these

Question 13

Traditional organization theory uses which of the following to motivate workers?

Accepted Answer

A)  Bonuses 
B)  Self-esteem 
C)  Nature of the work itself 
D)  Increased responsibility 
E)  Job satisfaction 
A)  Bonuses 
B)  Self-esteem 
C)  Nature of the work itself 
D)  Increased responsibility 
E)  Job satisfaction

Question 14

Bickford Company plans to sell 135,000 units in November and 180,000 units in December.Bickford's policy is that 10% of the following month's sales must be in ending inventory.On November 1, there were 14,000 units in inventory. It takes 30 minutes of direct labor time to make one unit.Direct labor wages average $17 per hour.Variable overhead is applied at the rate of $5 per direct labor hour.Fixed overhead is budgeted at $56,500 per month.What is the budgeted overhead for November?

Accepted Answer

A)  $444,500 
B)  $280,700 
C)  $404,000 
D)  $348,420 
E)  $192,920 
A)  $444,500 
B)  $280,700 
C)  $404,000 
D)  $348,420 
E)  $192,920

Question 15

A _________________ enables a firm to compute expected costs for a range of activity levels.

Accepted Answer

The answer of A _________________ enables a firm to compute...

Question 16

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:

- Using an after-the-fact flexible budget, calculate the total budget variance.

Accepted Answer

A)  $12,510 U 
B)  $3,600 U 
C)  $5,000 F 
D)  $12,510 F 
E)  None of these. 
A)  $12,510 U 
B)  $3,600 U 
C)  $5,000 F 
D)  $12,510 F 
E)  None of these.

Question 17

Which of the following is true of goal congruence?

Accepted Answer

A)  The alignment of managerial and organizational goals is often referred to as goal congruence. 
B)  Goal congruence occurs when a manager takes actions that improve budgetary performance in the short run but bring long-run harm to the firm. 
C)  Participative budgeting usually results in a lower goal congruence.. 
D)  Goal congruence occurs when top management has total control of the budgeting process, allowing only superficial participation from lower-level managers. 
E)  An ideal budgetary system fails to achieve complete goal congruence and, simultaneously, leads to negative behavior. 
A)  The alignment of managerial and organizational goals is often referred to as goal congruence. 
B)  Goal congruence occurs when a manager takes actions that improve budgetary performance in the short run but bring long-run harm to the firm. 
C)  Participative budgeting usually results in a lower goal congruence.. 
D)  Goal congruence occurs when top management has total control of the budgeting process, allowing only superficial participation from lower-level managers. 
E)  An ideal budgetary system fails to achieve complete goal congruence and, simultaneously, leads to negative behavior.

Question 18

Which of the following statements is true?

Accepted Answer

A)  The overhead budget is typically composed of variable overhead and fixed overhead. 
B)  The direct labor budget uses an average wage rate for direct labor. 
C)  The production budget is not converted into dollars. 
D)  The sales budget includes both units and dollars. 
E)  All of these. 
A)  The overhead budget is typically composed of variable overhead and fixed overhead. 
B)  The direct labor budget uses an average wage rate for direct labor. 
C)  The production budget is not converted into dollars. 
D)  The sales budget includes both units and dollars. 
E)  All of these.

Question 19

Kenner Company produces two products: SR200 and TX500.Budgeted sales for four months are as follows:  
  Kenner's ending inventory policy is that SR200 should have 15% of next month's sales in ending inventory and TX500 should have 40% of next month's sales in ending inventory.On May 1, there were 1,200 units of SR200 and 9,000 units of TX500.
TX500 requires 6 units of component A.(SR200 does not use component A.) There were 30,000 units of component A in inventory on May 1.Kenner wants to have 20% of the following month's production needs in inventory for Component A.
- What is the budgeted production of SR200 for May in units?

Accepted Answer

A)  8,750 
B)  9,950 
C)  8,000 
D)  1,200 
E)  10,500 
A)  8,750 
B)  9,950 
C)  8,000 
D)  1,200 
E)  10,500

Question 20

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 many pounds of berries will be purchased during the month of November?

Accepted Answer

A)  23,375 
B)  48,475 
C)  39,925 
D)  41,950 
E)  49,945 
A)  23,375 
B)  48,475 
C)  39,925 
D)  41,950 
E)  49,945

A company's planned borrowings and repayments appear on the

Bank loan officers would find which of the following budgets to be one of the most important in determining whether or not to give a company a loan?

Workshape Company budgeted 250,000 units of production for June, 260,000 units for July, and 320,000 units for August.Each unit requires 0.30 direct labor hours.How many direct labor hours are budgeted for August?

Before-the-fact flexible budgets give expected outcomes for a range of activity levels.

An after-the-fact flexible budget allows managers to generate financial results from a number of potential scenarios.

The master budget is typically a comprehensive financial plan for the organization for the past fiscal year.

In preparing the direct labor budget, the average wage rate is used to calculate total direct labor cost.

A firm should develop a strategic plan before preparing a budget.

Which of the following budgets can be used for control?

The cash budget and budgeted balance sheet are part of the ________________.

Budgets identify objectives and the actions needed to achieve them because they are foresighted financial plans.

Traditional organization theory uses which of the following to motivate workers?

A _________________ enables a firm to compute expected costs for a range of activity levels.

Which of the following is true of goal congruence?

Which of the following statements is true?

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

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Exam 9: Profit Planning and Flexible Budgets

A company's planned borrowings and repayments appear on the

Bank loan officers would find which of the following budgets to be one of the most important in determining whether or not to give a company a loan?

Workshape Company budgeted 250,000 units of production for June, 260,000 units for July, and 320,000 units for August.Each unit requires 0.30 direct labor hours.How many direct labor hours are budgeted for August?

Before-the-fact flexible budgets give expected outcomes for a range of activity levels.

An after-the-fact flexible budget allows managers to generate financial results from a number of potential scenarios.

The master budget is typically a comprehensive financial plan for the organization for the past fiscal year.

In preparing the direct labor budget, the average wage rate is used to calculate total direct labor cost.

A firm should develop a strategic plan before preparing a budget.

Which of the following budgets can be used for control?

The cash budget and budgeted balance sheet are part of the ________________.

Budgets identify objectives and the actions needed to achieve them because they are foresighted financial plans.

Traditional organization theory uses which of the following to motivate workers?

A _________________ enables a firm to compute expected costs for a range of activity levels.

Which of the following is true of goal congruence?

Which of the following statements is true?

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