Question 1

Principal components of a master budget include which of the following?

Accepted Answer

A)  Production budget 
B)  Sales budget 
C)  Capital expenditures budget 
D)  All of the above 
A)  Production budget 
B)  Sales budget 
C)  Capital expenditures budget 
D)  All of the above

Question 2

An August sales forecast projects 6,000 units are going to be sold at a price of $11.50 per unit. The desired ending iventory in units is 15% higher than the beginning inventory of 1,000 units. Total August sales are anticipated to be:

Accepted Answer

A)  $80,500 
B)  $69,000 
C)  $60,000 
D)  $57,500 
A)  $80,500 
B)  $69,000 
C)  $60,000 
D)  $57,500

Question 3

Below is budgeted production and sales information for Flushing Company for the month of December:   The unit selling price for product XXX is $5 and for product ZZZ is $15.
Budgeted production for product ZZZ during the month is:

Accepted Answer

A)  403,000 units 
B)  380,000 units 
C)  397,000 units 
D)  417,000 units 
A)  403,000 units 
B)  380,000 units 
C)  397,000 units 
D)  417,000 units

Question 4

The production budgets are used to prepare which of the following budgets.

Accepted Answer

A)  Operating expenses 
B)  Direct materials purchases, direct labor cost, factory overhead cost 
C)  Sales in dollars 
D)  Sales in units 
A)  Operating expenses 
B)  Direct materials purchases, direct labor cost, factory overhead cost 
C)  Sales in dollars 
D)  Sales in units

Question 5

At the beginning of the period, the Cutting Department budgeted direct labor of $30,000 and supervisor salaries of $20,000 for 3,000 hours of production. The department actually completed 5,000 hours of production. Determine the budget for the department assuming that it uses flexible budgeting?

Accepted Answer

The answer of At the beginning of the period, the...

Question 6

Past performance is the best overall basis for evaluating current performance and assessing the need for corrective action.

Accepted Answer

A) True 
 B)False

Question 7

Below is budgeted production and sales information for Bluebird Company for the month of December:   The unit selling price for product XXX is $5 and for product ZZZ is $14.
Budgeted production for product ZZZ during the month is:

Accepted Answer

A)  460,000 units 
B)  475,000 units 
C)  457,000 units 
D)  463,000 units 
A)  460,000 units 
B)  475,000 units 
C)  457,000 units 
D)  463,000 units

Question 8

Supervisor salaries, maintenance, and indirect factory wages would normally appear in the factory overhead cost budget.

Accepted Answer

A) True 
 B)False

Question 9

A department store has budgeted sales of 12,000 men's suits in September. Management wants to have 6,000 suits in inventory at the end of the month to prepare for the winter season. Beginning inventory for September is expected to be 4,000 units. What is the dollar amount of the purchase of suits? Each suit has a cost of $75.

Accepted Answer

A)  $900,000 
B)  $1,050,000 
C)  $1,350,000 
D)  $1,200,000 
A)  $900,000 
B)  $1,050,000 
C)  $1,350,000 
D)  $1,200,000

Question 10

Production and sales estimates for June are as follows:   The number of units expected to be manufactured in June is:

Accepted Answer

A)  10,000 
B)  11,500 
C)  14,500 
D)  12,500 
A)  10,000 
B)  11,500 
C)  14,500 
D)  12,500

Question 11

If Division Inc. expects to sell 200,000 units in 2012, desires ending inventory of 24,000 units, and has 22,000 units on hand as of the beginning of the year, the budgeted volume of production for 2012 is 198,000 units.

Accepted Answer

A) True 
 B)False

Question 12

Why is the sales budget usually prepared first?

Accepted Answer

The sales budget is normally prepared fi

Question 13

The cash budget presents the expected inflow and outflow of cash for a specified period of time.

Accepted Answer

A) True 
 B)False

Question 14

A variant of fiscal-year budgeting whereby a twelve-month projection into the future is maintained at all times is termed:

Accepted Answer

A)  flexible budgeting 
B)  continuous budgeting 
C)  zero-based budgeting 
D)  master budgeting 
A)  flexible budgeting 
B)  continuous budgeting 
C)  zero-based budgeting 
D)  master budgeting

Question 15

For January, sales revenue is $700,000; sales commissions are 5% of sales; the sales manager's salary is $96,000; advertising expenses are $90,000; shipping expenses total 2% of sales; and miscellaneous selling expenses are $2,100 plus 1/2 of 1% of sales. Total selling expenses for the month of January are:

Accepted Answer

A)  $157,100 
B)  $240,600 
C)  $183,750 
D)  $182,100 
A)  $157,100 
B)  $240,600 
C)  $183,750 
D)  $182,100

Question 16

If budgeted beginning inventory is $8,300, budgeted ending inventory is $9,400, and budgeted cost of goods sold is $10,260, budgeted purchases should be:

Accepted Answer

A)  $1,100 
B)  $9,300 
C)  $11,360 
D)  $11,250 
A)  $1,100 
B)  $9,300 
C)  $11,360 
D)  $11,250

Question 17

When budget goals are set too tight, the budget becomes less effective as a tool for planning and controlling operations.

Accepted Answer

A) True 
 B)False

Question 18

Below is budgeted production and sales information for Flushing Company for the month of December:   The unit selling price for product XXX is $5 and for product ZZZ is $15.
Budgeted sales for the month are:

Accepted Answer

A)  $3,180,000 
B)  $5,820,000 
C)  $1,800,000 
D)  $8,500,000 
A)  $3,180,000 
B)  $5,820,000 
C)  $1,800,000 
D)  $8,500,000

Question 19

Nuthatch Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business are $260,000, $375,000, and $400,000, respectively, for September, October, and November. The company expects to sell 30% of its merchandise for cash. Of sales on account, 80% are expected to be collected in the month of the sale and 20% in the month following the sale. The cash collections in September from accounts receivable are:

Accepted Answer

A)  $223,600 
B)  $145,600 
C)  $182,000 
D)  $168,000 
A)  $223,600 
B)  $145,600 
C)  $182,000 
D)  $168,000

Question 20

Budgets are prepared in the Accounting Department and monitored by various department managers.

Accepted Answer

A) True 
 B)False

Exam 21: Budgeting

Principal components of a master budget include which of the following?

An August sales forecast projects 6,000 units are going to be sold at a price of $11.50 per unit. The desired ending iventory in units is 15% higher than the beginning inventory of 1,000 units. Total August sales are anticipated to be:

Below is budgeted production and sales information for Flushing Company for the month of December: The unit selling price for product XXX is $5 and for product ZZZ is $15. Budgeted production for product ZZZ during the month is:

The production budgets are used to prepare which of the following budgets.

At the beginning of the period, the Cutting Department budgeted direct labor of $30,000 and supervisor salaries of $20,000 for 3,000 hours of production. The department actually completed 5,000 hours of production. Determine the budget for the department assuming that it uses flexible budgeting?

Past performance is the best overall basis for evaluating current performance and assessing the need for corrective action.

Below is budgeted production and sales information for Bluebird Company for the month of December: The unit selling price for product XXX is $5 and for product ZZZ is $14. Budgeted production for product ZZZ during the month is:

Supervisor salaries, maintenance, and indirect factory wages would normally appear in the factory overhead cost budget.

Production and sales estimates for June are as follows: The number of units expected to be manufactured in June is:

If Division Inc. expects to sell 200,000 units in 2012, desires ending inventory of 24,000 units, and has 22,000 units on hand as of the beginning of the year, the budgeted volume of production for 2012 is 198,000 units.

Why is the sales budget usually prepared first?

The cash budget presents the expected inflow and outflow of cash for a specified period of time.

A variant of fiscal-year budgeting whereby a twelve-month projection into the future is maintained at all times is termed:

If budgeted beginning inventory is $8,300, budgeted ending inventory is $9,400, and budgeted cost of goods sold is $10,260, budgeted purchases should be:

When budget goals are set too tight, the budget becomes less effective as a tool for planning and controlling operations.

Below is budgeted production and sales information for Flushing Company for the month of December: The unit selling price for product XXX is $5 and for product ZZZ is $15. Budgeted sales for the month are:

Budgets are prepared in the Accounting Department and monitored by various department managers.

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Cost Management for Just-In-Time Environments

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