Question 1

Which of the following terms describes the use of input from lower-management and middle-management employees in developing budgets?

Accepted Answer

A) benchmarking. 
B) participative budgeting. 
C) bottom-up budgeting. 
D) motivational budgeting. 
A) benchmarking. 
B) participative budgeting. 
C) bottom-up budgeting. 
D) motivational budgeting.

Question 2

If management desires finished goods inventory to decrease over the period,what can be said about the relationship between units produced and units sold?

Accepted Answer

A) Units produced > units sold. B) Units produced < units sold. C) Units produced = units sold. D) Nothing can be said without more information. A) Units produced > units sold. B) Units produced < units sold. C) Units produced = units sold. D) Nothing can be said without more information.

Question 3

In what type of responsibility centers are the managers responsible for revenues,only?

Accepted Answer

A) Cost 
B) Revenue 
C) Profit 
D) Investment 
A) Cost 
B) Revenue 
C) Profit 
D) Investment

Question 4

Which of the following is not a benefit of participative or grassroots budgeting?

Accepted Answer

A) The process of participative budgeting can be time consuming. 
B) Participating budgeting enhances employee motivation and acceptance of goals. 
C) Participative budgeting provides information that enables employees to associate rewards and penalties with performance. 
D) Participative budgeting yields information that employees know but managers do not know. 
A) The process of participative budgeting can be time consuming. 
B) Participating budgeting enhances employee motivation and acceptance of goals. 
C) Participative budgeting provides information that enables employees to associate rewards and penalties with performance. 
D) Participative budgeting yields information that employees know but managers do not know.

Question 5

Based on the types of costs incurred,what are the two categories of cost centers?

Accepted Answer

A) engineered cost centers and discretionary cost centers. 
B) direct cost centers and indirect cost centers. 
C) sunk cost centers and opportunity cost centers. 
D) short-term cost centers and long-term cost centers. 
A) engineered cost centers and discretionary cost centers. 
B) direct cost centers and indirect cost centers. 
C) sunk cost centers and opportunity cost centers. 
D) short-term cost centers and long-term cost centers.

Question 6

Which of the following statements is correct regarding marketing travel costs?

Accepted Answer

A) Marketing travel costs are incurred for customer-related activities. 
B) Marketing travel costs are fixed in the long-term. 
C) Marketing travel costs are variable in the short-term. 
D) both "a" and "b" 
A) Marketing travel costs are incurred for customer-related activities. 
B) Marketing travel costs are fixed in the long-term. 
C) Marketing travel costs are variable in the short-term. 
D) both "a" and "b"

Question 7

Compare the four types of responsibility centers.

Accepted Answer

Managers are responsible for (

Question 8

Julianna Company
Julianna Company budgets on an annual basis for its fiscal year.The following beginning and ending inventory levels (in units)are planned for the fiscal year of July 1,20X1 through June 30,20X2.
   
*Two (2)units of raw material are needed to produce each unit of finished product.
Refer to Julianna Company.If Julianna plans to sell 480,000 units during the 20X1-20X2 fiscal year,what is the number of units it would have to manufacture during the year?

Accepted Answer

The company needs 480,000 units of finis

Question 9

What is the income statement portion of the master budget known as?

Accepted Answer

A) profit plan. 
B) tactical short-range profit plan. 
C) static budget. 
D) all of the above. 
A) profit plan. 
B) tactical short-range profit plan. 
C) static budget. 
D) all of the above.

Question 10

To reduce subjectivity in the budgeting process and gather as much information as possible,management often uses which of the following method(s)?

Accepted Answer

A) asking sales staff and/or market researchers for an estimate of the future period's sales. 
B) using the Delphi technique and trend analysis. 
C) entering past sales data into a regression model to obtain a statistical estimate of factors affecting sales (econometric model). 
D) all of the above. 
A) asking sales staff and/or market researchers for an estimate of the future period's sales. 
B) using the Delphi technique and trend analysis. 
C) entering past sales data into a regression model to obtain a statistical estimate of factors affecting sales (econometric model). 
D) all of the above.

Question 11

When production levels are expected to increase within a relevant range,and a flexible budget is used,what effects would be anticipated with respect to each of the following?
Fixed Costs Variable Costs
Per Unit Per Unit

Accepted Answer

A) Decrease Increase 
B) Decrease No Change 
C) No Change No Change 
D) No Change Increase 
A) Decrease Increase 
B) Decrease No Change 
C) No Change No Change 
D) No Change Increase

Question 12

Incentive compatible compensation schemes often create many opportunities as well as problems.Identify two negative outcomes of incentive compensation systems,and suggest how companies can overcome them.

Accepted Answer

Two negative outcomes of incentive compa

Question 13

In what type of responsibility centers are the managers responsible for revenues,costs,and assets?

Accepted Answer

A) Cost. 
B) Revenue. 
C) Profit. 
D) Investment. 
A) Cost. 
B) Revenue. 
C) Profit. 
D) Investment.

Question 14

A chemical company manufactures an ointment.Sales for the next year are estimated at 100,000 units.The beginning finished goods inventory contains 20,000 units.The target for each year's ending inventory is 15,000 units.How many units will be scheduled for production this year?

Accepted Answer

The answer of A chemical company manufactures an ointment.Sales for...

Question 15

A manufacturing division of a company would most likely be evaluated as a(n)

Accepted Answer

A) cost center. 
B) investment center. 
C) revenue center. 
D) asset center. 
A) cost center. 
B) investment center. 
C) revenue center. 
D) asset center.

Question 16

Which of the following departments is likely to be an investment center?

Accepted Answer

A) Machining department 
B) Food products division 
C) Personnel department 
D) Accounting department 
A) Machining department 
B) Food products division 
C) Personnel department 
D) Accounting department

Question 17

The master budget for governmental organizations differs from that of public companies because the budget for governmental organizations provides the

Accepted Answer

A) organization's authority to produce and sell goods. 
B) organization's authority to produce and provide services. 
C) legal authorization for expenditures. 
D) all of the above 
A) organization's authority to produce and sell goods. 
B) organization's authority to produce and provide services. 
C) legal authorization for expenditures. 
D) all of the above

Question 18

Solving for cash payments (Appendix 9.1).Florida Corporation purchases raw materials on account from various suppliers.It normally pays for 60 percent of these in the month purchased,30 percent in the first month after purchase,and the remaining 10 percent in the second month after purchase.Raw materials purchases during the last five months of the year are expected to be
   
Required:
Compute the expected amount of cash payments to suppliers for the months of October,November,and December.

Accepted Answer

(Appendix 9.1)(Flori

Question 19

Many companies have streamlined the budget process,developed business plans,and allowed analysts to be proactive in monitoring results by

Accepted Answer

A) using hundreds of spreadsheets 
B) compiling and verifying data from multiple sources 
C) implementing a web-based enterprise-wide budgeting solution 
D) adopting a two-year budgeting cycle. 
A) using hundreds of spreadsheets 
B) compiling and verifying data from multiple sources 
C) implementing a web-based enterprise-wide budgeting solution 
D) adopting a two-year budgeting cycle.

Question 20

A flexible budget is appropriate for a which of the following types of costs?
Direct-Labor Marketing
Budget Budget

Accepted Answer

A) No No 
B) No Yes 
C) Yes No 
D) Yes Yes 
A) No No 
B) No Yes 
C) Yes No 
D) Yes Yes

Which of the following terms describes the use of input from lower-management and middle-management employees in developing budgets?

If management desires finished goods inventory to decrease over the period,what can be said about the relationship between units produced and units sold?

In what type of responsibility centers are the managers responsible for revenues,only?

Which of the following is not a benefit of participative or grassroots budgeting?

Based on the types of costs incurred,what are the two categories of cost centers?

Which of the following statements is correct regarding marketing travel costs?

Compare the four types of responsibility centers.

What is the income statement portion of the master budget known as?

To reduce subjectivity in the budgeting process and gather as much information as possible,management often uses which of the following method(s)?

When production levels are expected to increase within a relevant range,and a flexible budget is used,what effects would be anticipated with respect to each of the following? Fixed Costs Variable Costs Per Unit Per Unit

Incentive compatible compensation schemes often create many opportunities as well as problems.Identify two negative outcomes of incentive compensation systems,and suggest how companies can overcome them.

In what type of responsibility centers are the managers responsible for revenues,costs,and assets?

A chemical company manufactures an ointment.Sales for the next year are estimated at 100,000 units.The beginning finished goods inventory contains 20,000 units.The target for each year's ending inventory is 15,000 units.How many units will be scheduled for production this year?

A manufacturing division of a company would most likely be evaluated as a(n)

Which of the following departments is likely to be an investment center?

The master budget for governmental organizations differs from that of public companies because the budget for governmental organizations provides the

Many companies have streamlined the budget process,developed business plans,and allowed analysts to be proactive in monitoring results by

A flexible budget is appropriate for a which of the following types of costs? Direct-Labor Marketing Budget Budget

Fundamental Concepts

Measuring Product Costs

Activity-Based Management

Strategic Management of Costs,quality,and Time

Cost Drivers and Cost Behavior

Financial Modeling for Short-Term Decision Making

Differential Cost Analysis for Operating Decisions

Capital Expenditure Decisions

Profit and Cost Center Performance Evaluation

Investment Center Performance Evaluation

Incentive Issues

Allocating Costs to Responsibility Centers

Filters

Exam 9: Profit Planning and Budgeting

Which of the following terms describes the use of input from lower-management and middle-management employees in developing budgets?

If management desires finished goods inventory to decrease over the period,what can be said about the relationship between units produced and units sold?

In what type of responsibility centers are the managers responsible for revenues,only?

Which of the following is not a benefit of participative or grassroots budgeting?

Based on the types of costs incurred,what are the two categories of cost centers?

Which of the following statements is correct regarding marketing travel costs?

Compare the four types of responsibility centers.

What is the income statement portion of the master budget known as?

To reduce subjectivity in the budgeting process and gather as much information as possible,management often uses which of the following method(s)?

When production levels are expected to increase within a relevant range,and a flexible budget is used,what effects would be anticipated with respect to each of the following? Fixed Costs Variable Costs Per Unit Per Unit

Incentive compatible compensation schemes often create many opportunities as well as problems.Identify two negative outcomes of incentive compensation systems,and suggest how companies can overcome them.

In what type of responsibility centers are the managers responsible for revenues,costs,and assets?

A chemical company manufactures an ointment.Sales for the next year are estimated at 100,000 units.The beginning finished goods inventory contains 20,000 units.The target for each year's ending inventory is 15,000 units.How many units will be scheduled for production this year?

A manufacturing division of a company would most likely be evaluated as a(n)

Which of the following departments is likely to be an investment center?

The master budget for governmental organizations differs from that of public companies because the budget for governmental organizations provides the

Many companies have streamlined the budget process,developed business plans,and allowed analysts to be proactive in monitoring results by

A flexible budget is appropriate for a which of the following types of costs? Direct-Labor Marketing Budget Budget

Fundamental Concepts

Measuring Product Costs

Activity-Based Management

Strategic Management of Costs,quality,and Time

Cost Drivers and Cost Behavior

Financial Modeling for Short-Term Decision Making

Differential Cost Analysis for Operating Decisions

Capital Expenditure Decisions

Profit and Cost Center Performance Evaluation

Investment Center Performance Evaluation

Incentive Issues

Allocating Costs to Responsibility Centers

Filters