Question 1

Mentha Company currently has the following statistics: Days in accounts receivable - 68
Operating cycle - 148
What is Mentha's days in inventory?

Accepted Answer

A) 80 days 
B) 68 days 
C) 148 days 
D) Cannot be determined from the information given 
A) 80 days 
B) 68 days 
C) 148 days 
D) Cannot be determined from the information given

Question 2

Which of the following is not considered an operating budget?

Accepted Answer

A) Manufacturing cost budget 
B) Production schedule 
C) Capital expenditures budget 
D) Sales forecast 
A) Manufacturing cost budget 
B) Production schedule 
C) Capital expenditures budget 
D) Sales forecast

Question 3

The total quality management approach to budgeting sets budgeted amounts at levels that can be achieved through reasonably efficient operations.

Accepted Answer

A) True 
 B)False

Question 4

When budgeted amounts are set at reasonable and achievable levels:

Accepted Answer

A) They reflect a "total quality management" philosophy of management. 
B) A highly efficient department should fall slightly short of budget standards. 
C) Meeting the budgeted amounts ensures a maximum level of profitability. 
D) Failure to stay within the budget is viewed as an unacceptable level of performance. 
A) They reflect a "total quality management" philosophy of management. 
B) A highly efficient department should fall slightly short of budget standards. 
C) Meeting the budgeted amounts ensures a maximum level of profitability. 
D) Failure to stay within the budget is viewed as an unacceptable level of performance.

Question 5

The benefits of budgeting include all of the following except:

Accepted Answer

A) Enabling the company to produce more for less cost. 
B) Assigning responsibility for situations that require corrective action. 
C) Coordinating activities between departments within the organization. 
D) Creating standards for evaluating performance. 
A) Enabling the company to produce more for less cost. 
B) Assigning responsibility for situations that require corrective action. 
C) Coordinating activities between departments within the organization. 
D) Creating standards for evaluating performance.

Question 6

[The following information applies to the questions displayed below.]
On October 1 of the current year,Molloy Corporation prepared a cash budget for October,November,and December.All of Molloy's sales are made on account.The following information was used in preparing estimated cash collections:
   Approximately 60% of all sales are collected in the month of the sale,30% is collected in the following month,and 10% is collected in the month thereafter.
-Budgeted collections from customers in October total:

Accepted Answer

A) $39,000. 
B) $27,000. 
C) $31,000. 
D) $110,000. 
A) $39,000. 
B) $27,000. 
C) $31,000. 
D) $110,000.

Question 7

Cash receipts budget
The director of budgeting for Bond Products is beginning the process of preparing a cash budget for each month of the coming year.The sales forecast for the month of January is as follows:   In the past,the accounts receivable originating from credit sales have been collected in the following pattern:
   Credit sales in the last two months of the current year,some of which remain uncollected at year-end,were as follows:   Compute the amount of cash expected to be collected from customers in January of the coming year.

Accepted Answer

The answer of Cash receipts budget
The director of budgeting for...

Question 8

The master budget may be comprised of:

Accepted Answer

A) The production budget. 
B) The current period income statement. 
C) The current period balance sheet. 
D) The current period statement of cash flows. 
A) The production budget. 
B) The current period income statement. 
C) The current period balance sheet. 
D) The current period statement of cash flows.

Question 9

Which of the following is not a characteristic of the total quality approach to setting budgetary targets?

Accepted Answer

A) Absolute efficiency 
B) A perception that the budget is fair 
C) Budgetary targets that are unattainable 
D) Budgeted performance expectations that cannot be exceeded 
A) Absolute efficiency 
B) A perception that the budget is fair 
C) Budgetary targets that are unattainable 
D) Budgeted performance expectations that cannot be exceeded

Question 10

A flexible budget:

Accepted Answer

A) Consists of estimates of costs and expenses for various possible levels of activity. 
B) Is designed to be adjusted at frequent intervals for changes in the general price level. 
C) Is better suited for use with a job cost system than a standard cost system. 
D) Cannot be prepared when a standard cost system is in use. 
A) Consists of estimates of costs and expenses for various possible levels of activity. 
B) Is designed to be adjusted at frequent intervals for changes in the general price level. 
C) Is better suited for use with a job cost system than a standard cost system. 
D) Cannot be prepared when a standard cost system is in use.

Question 11

Explain what is meant by "profit rich,yet cash poor."

Accepted Answer

Companies must often tie up large sums o

Question 12

A flexible budget allows management to spend more or less for labor and materials without regard to the amount of production.

Accepted Answer

A) True 
 B)False

Question 13

As the volume of output increases:

Accepted Answer

A) Variable costs per unit will increase. 
B) Variable costs per unit will decrease. 
C) Variable costs per unit will not change. 
D) Variable costs in total will decrease. 
A) Variable costs per unit will increase. 
B) Variable costs per unit will decrease. 
C) Variable costs per unit will not change. 
D) Variable costs in total will decrease.

Question 14

Which element of a master budget would normally be prepared first?

Accepted Answer

A) A production budget 
B) A cash budget 
C) A budget of operating expenses 
D) A sales forecast 
A) A production budget 
B) A cash budget 
C) A budget of operating expenses 
D) A sales forecast

Question 15

A flexible budget is one that:

Accepted Answer

A) Is revised monthly in the light of changing business conditions. 
B) Is a compromise plan reflecting diverse views of various supervisors. 
C) Contains estimated cost data for several different levels of activity. 
D) Separates factory overhead between the variable and fixed portions. 
A) Is revised monthly in the light of changing business conditions. 
B) Is a compromise plan reflecting diverse views of various supervisors. 
C) Contains estimated cost data for several different levels of activity. 
D) Separates factory overhead between the variable and fixed portions.

Question 16

Which of the following is not a benefit of a careful and thorough budgeting process?

Accepted Answer

A) Budgeting increases management's awareness of the company's external economic environment. 
B) Budgeted net income assures the company of operating profitably. 
C) The budget may provide advance warning of pending problems. 
D) Budgets provide a yardstick for evaluating future performance. 
A) Budgeting increases management's awareness of the company's external economic environment. 
B) Budgeted net income assures the company of operating profitably. 
C) The budget may provide advance warning of pending problems. 
D) Budgets provide a yardstick for evaluating future performance.

Question 17

The production schedule in units:

Accepted Answer

A) Cannot be prepared until the budgeted income statement is completed. 
B) Is dependent upon the sales forecast for the period. 
C) Is based upon the manufacturing cost budget,that is,upon the level of funds available for manufacturing costs. 
D) Is the starting point in the preparation of the master budget. 
A) Cannot be prepared until the budgeted income statement is completed. 
B) Is dependent upon the sales forecast for the period. 
C) Is based upon the manufacturing cost budget,that is,upon the level of funds available for manufacturing costs. 
D) Is the starting point in the preparation of the master budget.

Question 18

[The following information applies to the questions displayed below.]
Ross Corporation makes all sales on account.The June 30th balance sheet balance in its accounts receivable is $400,000,of which $240,000 pertain to sales that were made during June.Budgeted sales for July are $1,250,000.Ross collects 70% of sales in the month of sale;20% in the following month;and the final 10% in the second month after the sale.
-What are Ross's budgeted collections for July?

Accepted Answer

A) $1,275,000 
B) $939,000 
C) $1,195,000 
D) $915,000 
A) $1,275,000 
B) $939,000 
C) $1,195,000 
D) $915,000

Question 19

Budgeted debt service costs
On April 1,Fisher Corporation borrowed $400,000 from its bank by signing a 9%,5-year note payable.The note calls for 60 monthly payments of $6,150,which includes both interest and principal components.
(a)Interest expense budgeted for April amounts to: $________
(b)The carrying value of the note to be reported in the company's budgeted balance sheet as of April 30 is: $________
(c)Interest expense budgeted for May amounts to (round to nearest whole dollar): $________
(d)The carrying value of the note to be reported in the company's budgeted balance sheet as of May 31 is (round to nearest whole dollar): $________

Accepted Answer

(a)$3,000

Question 20

[The following information applies to the questions displayed below.]
The following information is from the manufacturing budget and budgeted financial statements of Altman Corp.:
  
-For the year,budgeted cash payments to suppliers amounted to:

Accepted Answer

A) $344,000. 
B) $350,000. 
C) $334,000. 
D) $354,000. 
A) $344,000. 
B) $350,000. 
C) $334,000. 
D) $354,000.

Exam 23: Operational Budgeting

Mentha Company currently has the following statistics: Days in accounts receivable - 68 Operating cycle - 148 What is Mentha's days in inventory?

Which of the following is not considered an operating budget?

The total quality management approach to budgeting sets budgeted amounts at levels that can be achieved through reasonably efficient operations.

When budgeted amounts are set at reasonable and achievable levels:

The benefits of budgeting include all of the following except:

The master budget may be comprised of:

Which of the following is not a characteristic of the total quality approach to setting budgetary targets?

A flexible budget:

Explain what is meant by "profit rich,yet cash poor."

A flexible budget allows management to spend more or less for labor and materials without regard to the amount of production.

As the volume of output increases:

Which element of a master budget would normally be prepared first?

A flexible budget is one that:

Which of the following is not a benefit of a careful and thorough budgeting process?

The production schedule in units:

[The following information applies to the questions displayed below.] The following information is from the manufacturing budget and budgeted financial statements of Altman Corp.: -For the year,budgeted cash payments to suppliers amounted to:

Accounting: Information for Decision Making

Basic Financial Statements

The Accounting Cycle: Capturing Economic Events

The Accounting Cycle: Accruals and Deferrals

The Accounting Cycle: Reporting Financial Results

Merchandising Activities

Financial Assets

Inventories and the Cost of Goods Sold

Plant and Intangible Assets

Liabilities

Stockholders Equity: Paid-In Capital

Income and Changes in Retained Earnings

Statement of Cash Flows

Financial Statement Analysis

Global Business and Accounting

Management Accounting

Job Order Cost Systems and Overhead Allocations

Process Costing

Costing and the Value Chain

Cost-Volume-Profit Analysis

Incremental Analysis

Responsibility Accounting and Transfer Pricing

Standard Cost Systems

Rewarding Business Performance

Capital Budgeting

the Time Value of Money: Future Amounts and Present Values

Forms of Business Organization

Filters