Question 1

The budget committee has the responsibility for coordinating the preparation of the budget.

Accepted Answer

A) True 
 B)False

Question 2

Long-range plans are used more as a review of progress toward long-term goals rather than an evaluation of specific results to be achieved.

Accepted Answer

A) True 
 B)False

Question 3

An appropriate activity index for a college or university for budgeting faculty positions would be the

Accepted Answer

A) faculty hours worked. 
B) number of administrators. 
C) credit hours taught by a department. 
D) number of days in the school term.

Question 4

Mapleview, Inc.has the following budgeted sales: July $200,000, August $300,000, and September $250,000.40% of the sales are for cash and 60% are on credit.For the credit sales, 50% are collected in the month of sale, and 50% the next month.The total expected cash receipts during September are

Accepted Answer

A) $280,000. 
B) $265,000. 
C) $262,500. 
D) $250,000.

Question 5

The budget itself and the administration of the budget are entirely accounting responsibilities.

Accepted Answer

A) True 
 B)False

Question 6

The budget committee in a company is often headed by the

Accepted Answer

A) president. 
B) controller. 
C) treasurer. 
D) budget director.

Question 7

A company determined that the budgeted cost of producing a product is $30 per unit.On June 1, there were 80,000 units on hand, the sales department budgeted sales of 300,000 units in June, and the company desires to have 120,000 units on hand on June 30.The budgeted cost of goods sold for June would be

Accepted Answer

A) $7,800,000. 
B) $11,400,000. 
C) $9,000,000. 
D) $10,200,000.

Question 8

What is the proper preparation sequencing of the following budgets?
1.	Budgeted Balance Sheet
2.	Sales Budget
3.	Selling and Administrative Budget
4.	Budgeted Income Statement

Accepted Answer

A) 1, 2, 3, 4 
B) 2, 3, 1, 4 
C) 2, 3, 4, 1 
D) 2, 4, 1, 3

Question 9

A critical factor in budgeting for a service firm is to

Accepted Answer

A) hire professional staff to perform the budgeting work. 
B) coordinate professional staff needs with anticipated services. 
C) classify all personnel as either variable or fixed. 
D) budget expenditures before anticipated receipts.

Question 10

The master budget consists of operating and financial budgets.

Accepted Answer

A) True 
 B)False

Question 11

Lorie Nursery plans to sell 320 potted plants during April and 240 units in May.Lorie Nursery keeps 15% of the next month's sales as ending inventory.How many units should Lorie Nursery produce during April?

Accepted Answer

A) 308 
B) 332 
C) 320 
D) 356

Question 12

A well-developed budget can operate and enforce itself.

Accepted Answer

A) True 
 B)False

Question 13

Orange Co.is a manufacturer and Pineapple Company is a merchandiser.What is the difference in the budgets the two entities will prepare?

Accepted Answer

A) Orange Co. will prepare a production budget, and Pineapple Company will prepare a merchandise purchases budget. 
B) Orange Co. will prepare a sales forecast, and Pineapple Company will prepare a sales budget. 
C) Pineapple Company will prepare a production budget, and Orange Co. will prepare a merchandise purchases budget. 
D) Both companies will prepare the same types of budgets.

Question 14

Comma Co.makes and sells widgets.The company is in the process of preparing its selling and administrative expense budget for the month.The following budget data are available: $\begin{array}{lll}\text { Item }&\text { Variable Cost Per Unit Sold }&\text { Monthly Fixed Cost }\
\text { Sales commissions } & \$ 1 & \$ 10,000 \
\text { Shipping } & \$ 3 & \
\text { Advertising } & \$ 4 &\
\text { Executive salaries } & & \$ 120,000 \
\text { Depreciation on office equipment } & & \$ 4,000 \
\text { Other } & \$ 2 & \$ 6,000
\end{array}$ Expenses are paid in the month incurred.If the company has budgeted to sell 80,000 widgets in October, how much is the total budgeted selling and administrative expenses for October?

Accepted Answer

A) $940,000 
B) $140,000 
C) $930,000 
D) $800,000

Question 15

The direct materials budget is derived from the direct materials units required for production plus desired ending direct materials units less beginning direct materials units.

Accepted Answer

A) True 
 B)False

Question 16

A master budget consists of

Accepted Answer

A) an interrelated long-term plan and operating budgets. 
B) financial budgets and a long-term plan. 
C) interrelated financial budgets and operating budgets. 
D) all the accounting journals and ledgers used by a company.

Question 17

In many companies, responsibility for coordinating the preparation of the budget is assigned to

Accepted Answer

A) the company's independent certified public accountants. 
B) the company's internal auditors. 
C) the company's board of directors. 
D) a budget committee.

Question 18

Teller Co.is planning to sell 900 boxes of ceramic tile, with production estimated at 870 boxes during May.Each box of tile requires 44 pounds of clay mix and a quarter hour of direct labor.Clay mix costs $0.40 per pound and employees of the company are paid $12.00 per hour.Manufacturing overhead is applied at a rate of 110% of direct labor costs.Teller has 3,900 pounds of clay mix in beginning inventory and wants to have 4,500 pounds in ending inventory. What is the total amount to be budgeted for manufacturing overhead for the month?

Accepted Answer

A) $2,871 
B) $2,970 
C) $11,484 
D) $11,880

Exam 9: Reporting and Analyzing Long-Lived Assets

The budget committee has the responsibility for coordinating the preparation of the budget.

Long-range plans are used more as a review of progress toward long-term goals rather than an evaluation of specific results to be achieved.

An appropriate activity index for a college or university for budgeting faculty positions would be the

Mapleview, Inc.has the following budgeted sales: July $200,000, August $300,000, and September $250,000.40% of the sales are for cash and 60% are on credit.For the credit sales, 50% are collected in the month of sale, and 50% the next month.The total expected cash receipts during September are

The budget itself and the administration of the budget are entirely accounting responsibilities.

The budget committee in a company is often headed by the

What is the proper preparation sequencing of the following budgets? 1. Budgeted Balance Sheet 2. Sales Budget 3. Selling and Administrative Budget 4. Budgeted Income Statement

A critical factor in budgeting for a service firm is to

The master budget consists of operating and financial budgets.

Lorie Nursery plans to sell 320 potted plants during April and 240 units in May.Lorie Nursery keeps 15% of the next month's sales as ending inventory.How many units should Lorie Nursery produce during April?

A well-developed budget can operate and enforce itself.

Orange Co.is a manufacturer and Pineapple Company is a merchandiser.What is the difference in the budgets the two entities will prepare?

The direct materials budget is derived from the direct materials units required for production plus desired ending direct materials units less beginning direct materials units.

A master budget consists of

In many companies, responsibility for coordinating the preparation of the budget is assigned to