Exam 9: Profit Planning and Flexible Budgets

The department manager reviews the budget, provides policy guidelines and budgetary goals, and resolves differences that arise as the budget is prepared, approves the final budget, and monitors the actual performance of the organization as the year unfolds.

______________ are the means an organization uses to influence a manager to exert effort to achieve an organization's goals.

The production budget is prepared in units and in dollars.

The cash budget includes the beginning balance of cash, cash receipts, cash disbursements, and the ending balance of cash.

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

Which of the following is true of budgetary slack?

Direct materials needed for production is calculated by

The sales budget is used directly in the development of the production budget.

The ending finished goods inventory budget supplies information needed for the

A before-the-fact flexible budget:

Planet Company purchased goods worth $50,000 in July and expects to purchase goods worth $70,000 in August.Planet typically pays for 35% of purchases in the month of purchase and 65% in the following month.What are Planet Company's total expected cash disbursements for purchases in the month of August?

_________________ consists of beginning cash balance and the expected cash receipts.

The direct labor budget includes: units to be produced, direct labor time needed per unit, and total direct labor cost for the period.

A production budget is most important for which of the following?

_____________________ allows subordinate managers considerable say in how the budgets are established.

Which of the following is the most common starting point in the information gathering process for budgeting?

A company anticipates selling $200,000 of goods, of which $15,000 will probably be uncollectible.Which of the following statements is true?

A budget prepared for a particular level of activity is a(n)

The output of the cost of goods sold budget is entered into the pro forma balance sheet.

Movers Company manufactures sneakers.Production of their new sneaker for the coming three months is budgeted as follows: Each sneaker requires 2.5 hours of direct labor time.Direct labor wages average $16 per hour.Monthly variable overhead averages $10 per direct labor hour plus fixed overhead of $4,500.What is the total overhead budgeted for the month of September?