Exam 9: Budgeting Systems

People create budgetary slack because:

BeActive Sporting Goods sells tandem bicycles.The following data was taken from the most recent quarterly sales forecast.BeActive's cost for one bicycle is $125.What dollar amount should the company budget for June purchases?

Which of the following statements are true if optimum benefit is to be derived from the budget process?

Consider the following statements about budget administration.i.Regardless of size,the budgeting process in all organisations must be a formal process Ii)The budget manual is prepared to communicate budget procedures and deadlines to employees throughout the organisation. Iii)Good internal control procedures require that the manager responsible for managing the budget process be an individual other than the chief accountant.Which statement/s is/are true?

In preparing and using any budget,it is important that managers keep in mind the:

Budgeted sales for ABC Company are as follows: All stock is marked up to sell at its invoice cost plus 25 per cent.On average 60 per cent of credit sales are collected in the month of sale,35 per cent in the month following sale and the remainder is uncollectable.The budgeted cost of goods sold for the month of October is:

Which of the following is not typically a responsibility centre for a manufacturing firm?

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:

Top-down budgeting refers to:

Which of the following encompasses a detailed plan for using the basic factors of production material,labour and overhead to produce a product or provide a service?

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?

Which of the following indicate/s the overall financial results of the organisation's planned operations for the budget period?

Program budgeting:

Employees are always motivated to work towards the company's goals when budgets are handed down from top management as employees rarely have the time or the inclination to become involved in the budgeting process.

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.

Budgets that cover a particular period of time,longer than a year,are:

To communicate budget procedures and deadlines to employees throughout the organisation,the manager responsible for managing the budget often develops and disseminates a:

The annual financial budget is also called a: