Question 1

Top-down budgeting refers to

Accepted Answer

A)  a budgeting system that begins with sales forecasts and works downwards to the raw materials budget. 
B)  a budgeting systems that begins with budgeting the facility-level costs. 
C)  a budgeting system where senior managers impose budget targets on junior managers. 
D)  a budgeting system where there are frequent communications between top and bottom managers. 
A)  a budgeting system that begins with sales forecasts and works downwards to the raw materials budget. 
B)  a budgeting systems that begins with budgeting the facility-level costs. 
C)  a budgeting system where senior managers impose budget targets on junior managers. 
D)  a budgeting system where there are frequent communications between top and bottom managers.

Question 2

Budgeted financial statements include:

Accepted Answer

A)  a budgeted profit and loss statement. 
B)  a budgeted balance sheet. 
C)  a cash budget. 
D)  All of the given options 
A)  a budgeted profit and loss statement. 
B)  a budgeted balance sheet. 
C)  a cash budget. 
D)  All of the given options

Question 3

A budget manual communicates budget procedures and deadlines throughout the organisation.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following benefits is not provided by the budgeting process?

Accepted Answer

A)  Benchmarks 
B)  Performance evaluation 
C)  Competitive strategy 
D)  Facilitates communication 
A)  Benchmarks 
B)  Performance evaluation 
C)  Competitive strategy 
D)  Facilitates communication

Question 5

Which of the following items should be taken into account when setting budgets?

Accepted Answer

A)  Positive behaviour of employees is more likely to result if the budgetary process is participative. 
B)  The budget goals should not be so tight that they are unachievable. 
C)  The goals of the individual sections' budget should be aligned with the firm's goals. 
D)  All of the given answers 
A)  Positive behaviour of employees is more likely to result if the budgetary process is participative. 
B)  The budget goals should not be so tight that they are unachievable. 
C)  The goals of the individual sections' budget should be aligned with the firm's goals. 
D)  All of the given answers

Question 6

On January 1, Bandy Manufacturing plans to introduce a product called Handy Dandy. The company plans to sell each unit of Handy Dandy for $25.00. Management has forecast the following in sales units for the first three months.  
Each unit of Handy Dandy requires 2 kg of Dingaling and 1 hour of direct labour. Management wants to end each month with a Handy Dandy inventory level equal to 10 per cent of the following month's sales, and a Dingaling inventory equal to 5 per cent of the following month's production. Dingaling can be purchased for $3 per kg and direct labour costs are estimated to be $5.00 per hour. What are Bandy Manufacturing's budgeted prime costs in January?

Accepted Answer

A)  $235 560 
B)  $294 000 
C)  $385 000 
D)  None of the given answers 
A)  $235 560 
B)  $294 000 
C)  $385 000 
D)  None of the given answers

Question 7

EasySleep Inn is a chain of medium-priced hotels. Each year during the budgeting process, the manager of each hotel in the chain has to submit a capital expenditure request, justifying the amounts of expenditure they request. Top management then makes a decision on whether to fund each capital expenditure request. This is an example of which purpose of budgeting?

Accepted Answer

A)  Controlling profit 
B)  Allocating resources 
C)  Empowering employees 
D)  Evaluating performance and providing incentives 
A)  Controlling profit 
B)  Allocating resources 
C)  Empowering employees 
D)  Evaluating performance and providing incentives

Question 8

On January 1, Bandy Manufacturing plans to introduce a product called Handy Dandy. The company plans to sell each unit of Handy Dandy for $25.00. Management has forecast the following in sales units for the first three months.  
Each unit of Handy Dandy requires 2 kg of Dingaling and 1 hour of direct labour. Management wants to end each month with a Handy Dandy inventory level equal to 10 per cent of the following month's sales, and a Dingaling inventory equal to 5 per cent of the following month's production. Dingaling can be purchased for $3 per kg and direct labour costs are estimated to be $5.00 per hour. What amount should be budgeted for direct labour in February?

Accepted Answer

A)  $160 000 
B)  $146 000 
C)  $140 000 
D)  $134 000 
A)  $160 000 
B)  $146 000 
C)  $140 000 
D)  $134 000

Question 9

Which of the following shows the schedule of cash payments for the materials and services the firm purchased on account, and all cash payments for services that are paid in advance or paid at the time of purchase?

Accepted Answer

A)  Selling and administrative expense budget 
B)  Cash payments budget 
C)  Cash receipts budget 
D)  Overhead budget 
A)  Selling and administrative expense budget 
B)  Cash payments budget 
C)  Cash receipts budget 
D)  Overhead budget

Question 10

A budget that is continually updated by periodically adding a new incremental time period such as a quarter, and dropping the period just completed is a

Accepted Answer

A)  short-range budget. 
B)  long-range budget. 
C)  capital budget. 
D)  rolling budget. 
A)  short-range budget. 
B)  long-range budget. 
C)  capital budget. 
D)  rolling budget.

Question 11

Discuss how participative budgeting can achieve acceptance of the budget from staff.

Accepted Answer

The process of gaining acceptance of the

Question 12

Which of the following is/are likely to lead to budget acceptance?
I Targets are developed with employee inputs.
Ii Employees are held responsible for activities that they can control.
Iii Budget is cascaded down from corporate level to the various responsibility centres.

Accepted Answer

A)  i only 
B)  i and ii 
C)  i and iii 
D)  ii and iii 
A)  i only 
B)  i and ii 
C)  i and iii 
D)  ii and iii

Question 13

Program budgeting

Accepted Answer

A)  is similar to line item budgeting. 
B)  relates budget performance to the achievement of objectives. 
C)  develops qualitative performance criteria rather than quantitative criteria. 
D)  focuses on inputs rather than outputs. 
A)  is similar to line item budgeting. 
B)  relates budget performance to the achievement of objectives. 
C)  develops qualitative performance criteria rather than quantitative criteria. 
D)  focuses on inputs rather than outputs.

Question 14

A 'Rolling Budget' is also known as a

Accepted Answer

A)  revised budget. 
B)  reformed budget. 
C)  current budget. 
D)  continuous budget. 
A)  revised budget. 
B)  reformed budget. 
C)  current budget. 
D)  continuous budget.

Question 15

Which of the following external factors would not be considered when forecasting sales for a furniture manufacturer?

Accepted Answer

A)  General economic trends 
B)  Rising Australian dollar 
C)  Increasing foreign aid 
D)  Consumer's disposable income 
A)  General economic trends 
B)  Rising Australian dollar 
C)  Increasing foreign aid 
D)  Consumer's disposable income

Question 16

Briefly describe the five primary purposes of the budgeting process.

Accepted Answer

1 Planning. The most obvious purp

Question 17

Before any steps are taken in the budgeting process, it is essential that all involved in the process familiarise themselves with the strategic plans of the organisation so they can formulate the budget in light of these plans.

Accepted Answer

A) True 
 B)False

Question 18

Where an organisation elects to incorporate responsibility accounting into the firm, they will establish some common responsibilities centres such as cost, revenue, investment and expense.

Accepted Answer

A) True 
 B)False

Question 19

Lee's Appliances forecasts the following sales figures for the next four months.  
Cash sales average 10 per cent of total sales and credit sales are collected 50 per cent in the month of sale and 50 per cent in the month following sale. What are the estimated cash collections in May?

Accepted Answer

A)  $215 000 
B)  $207 500 
C)  $195 000 
D)  $82 500 
A)  $215 000 
B)  $207 500 
C)  $195 000 
D)  $82 500

Question 20

On January 1, Bandy Manufacturing plans to introduce a product called Handy Dandy. The company plans to sell each unit of Handy Dandy for $25.00. Management has forecast the following in sales units for the first three months.  
Each unit of Handy Dandy requires 2 kg of Dingaling and 1 hour of direct labour. Management wants to end each month with a Handy Dandy inventory level equal to 10 per cent of the following month's sales and a Dingaling inventory equal to 5 per cent of the following month's production. Dingaling can be purchased for $3 per kg and direct labour costs are estimated to be $5.00 per hour. How many units should Bandy Manufacturing produce in February?

Accepted Answer

A)  32 000 
B)  27 300 
C)  28 000 
D)  29 200 
A)  32 000 
B)  27 300 
C)  28 000 
D)  29 200

Top-down budgeting refers to

Budgeted financial statements include:

A budget manual communicates budget procedures and deadlines throughout the organisation.

Which of the following benefits is not provided by the budgeting process?

Which of the following items should be taken into account when setting budgets?

Which of the following shows the schedule of cash payments for the materials and services the firm purchased on account, and all cash payments for services that are paid in advance or paid at the time of purchase?

A budget that is continually updated by periodically adding a new incremental time period such as a quarter, and dropping the period just completed is a

Discuss how participative budgeting can achieve acceptance of the budget from staff.

Which of the following is/are likely to lead to budget acceptance? I Targets are developed with employee inputs. Ii Employees are held responsible for activities that they can control. Iii Budget is cascaded down from corporate level to the various responsibility centres.

Program budgeting

A 'Rolling Budget' is also known as a

Which of the following external factors would not be considered when forecasting sales for a furniture manufacturer?

Briefly describe the five primary purposes of the budgeting process.

Before any steps are taken in the budgeting process, it is essential that all involved in the process familiarise themselves with the strategic plans of the organisation so they can formulate the budget in light of these plans.

Where an organisation elects to incorporate responsibility accounting into the firm, they will establish some common responsibilities centres such as cost, revenue, investment and expense.

Lee's Appliances forecasts the following sales figures for the next four months. Cash sales average 10 per cent of total sales and credit sales are collected 50 per cent in the month of sale and 50 per cent in the month following sale. What are the estimated cash collections in May?

Management Accounting: Information for Creating Value and Managing Resources

Management Accounting: Cost Terms and Concepts

Cost Behaviour, Cost Drivers and Cost Estimation

Product Costing Systems

Process Costing and Operation Costing

Service Costing

A Closer Look at Overhead Costs

Activity-Based Costing

Standard Costs for Control: Direct Material and Direct Labour

Standard Costs for Control: Flexible Budgets and Manufacturing Overhead

Managing and Reporting Performance

Financial Performance Measures and Incentive Schemes

Strategic Performance Measurement Systems

Managing Suppliers and Customers

Managing Costs and Quality

Sustainability and Management Accounting

Cost Volume Profit Analysis

Information for Decisions: Relevant Costs and Benefits

Pricing and Product Mix Decisions

Information for Capital Expenditure Decisions

Filters

Exam 9: Budgeting Systems

Top-down budgeting refers to

Budgeted financial statements include:

A budget manual communicates budget procedures and deadlines throughout the organisation.

Which of the following benefits is not provided by the budgeting process?

Which of the following items should be taken into account when setting budgets?

Which of the following shows the schedule of cash payments for the materials and services the firm purchased on account, and all cash payments for services that are paid in advance or paid at the time of purchase?

A budget that is continually updated by periodically adding a new incremental time period such as a quarter, and dropping the period just completed is a

Discuss how participative budgeting can achieve acceptance of the budget from staff.

Which of the following is/are likely to lead to budget acceptance? I Targets are developed with employee inputs. Ii Employees are held responsible for activities that they can control. Iii Budget is cascaded down from corporate level to the various responsibility centres.

Program budgeting

A 'Rolling Budget' is also known as a

Which of the following external factors would not be considered when forecasting sales for a furniture manufacturer?

Briefly describe the five primary purposes of the budgeting process.

Before any steps are taken in the budgeting process, it is essential that all involved in the process familiarise themselves with the strategic plans of the organisation so they can formulate the budget in light of these plans.

Where an organisation elects to incorporate responsibility accounting into the firm, they will establish some common responsibilities centres such as cost, revenue, investment and expense.

Lee's Appliances forecasts the following sales figures for the next four months. Cash sales average 10 per cent of total sales and credit sales are collected 50 per cent in the month of sale and 50 per cent in the month following sale. What are the estimated cash collections in May?

Management Accounting: Information for Creating Value and Managing Resources

Management Accounting: Cost Terms and Concepts

Cost Behaviour, Cost Drivers and Cost Estimation

Product Costing Systems

Process Costing and Operation Costing

Service Costing

A Closer Look at Overhead Costs

Activity-Based Costing

Standard Costs for Control: Direct Material and Direct Labour

Standard Costs for Control: Flexible Budgets and Manufacturing Overhead

Managing and Reporting Performance

Financial Performance Measures and Incentive Schemes

Strategic Performance Measurement Systems

Managing Suppliers and Customers

Managing Costs and Quality

Sustainability and Management Accounting

Cost Volume Profit Analysis

Information for Decisions: Relevant Costs and Benefits

Pricing and Product Mix Decisions

Information for Capital Expenditure Decisions

Filters