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Homework  1.1 1.2  2.1 2.2  3.1 3.2  4.1 4.2 5.1 5.2  6.1 6.2  7.1  7.2  8.1  8.2  9.1   9.2  10.1  10.2  11.1  11.2  12.1 12.2  13.1  13.2  14.1  14.2  15.1   15.2
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Which budget is prepared directly after the sales budget in a manufacturing company?
Production Budget
 
The cash budget includes four major sections: receipts, disbursements, the cash excess or deficiency, and
financing.
 
Which of the following are advantages of budgeting? (Check all that apply.)
Budgets coordinate the activities of the entire organization by integrating the plans of its various parts.
The budgeting process can uncover potential bottlenecks before they occur.
Budgets define goals and objectives that can serve as benchmarks for evaluating subsequent performance.
Budgets force managers to think about and plan for the future.
 
Which budget is a detailed schedule showing the expected sales for the budget period?
Sales budget
 
The underlying idea behind _________ accounting is that a manager should be held accountable for only
those items the manager can actually control.
responsibility
 
Which budget shows all costs of production other than direct materials and direct labor?
Manufacturing overhead budget
 
The ______ budget consists of a number of separate, but interdependent, budgets that formally lay out the
company’s sales, production, and financial goals.
master
 
The purpose of a budget should be to (check all that apply):
establish goals
motivate people
coordinate efforts
 
In a manufacturing company, which budget shows the number of units that must be produced to satisfy sales
needs and to provide for the desired ending inventory?
Production budget
 
In a manufacturing company, the _________  _________ budget details the raw materials that must be
purchased to fulfill the production budget and to provide for adequate inventories.
direct materials
 
Which of the following budgets are directly based on number of expected units to be sold from the sales budget?
Purchases budget
Production budget
 
To calculate the direct labor requirement for each quarter:
multiply the number of direct labor hours required per unit times the number of units to be produced.
 
A manager who wants to submit a budget that is easy to attain will try to put budgetary ___________ into his or her budget.
slack
 
A(n) ________________ budget is prepared with the full cooperation of management at all levels.
self-imposed/participative
 
What is multiplied by the budgeted unit sales to obtain total sales on the sales budget?
Sales price per unit
 
The budgeted __________ shows a company’s planned net profit and serves as a benchmark against
which subsequent company performance can be measured.
income statement
 
ABC, Inc.’s expected sales for the first six month of the year are as follows.
Month                     Expected Unit Sales
January                                 12,000
February                              15,000
March                                   16,000
April                                       20,000
May                                       22,000
June                                       25,000
Management believes that an appropriate ending inventory is 25% of next month’s sales.
Calculate the number of units to be produced in March.
17,000
 
Gathering feedback to ensure that the plan is being followed is referred to as _________.
controlling
 
Which of the following budgets are needed to calculate unit product costs?
Direct materials budget
Manufacturing overhead budget
Direct labor budget
 
Required borrowings on a cash budget is calculated by:
adding the desired ending cash balance to the amount of cash deficiency.
 
The budget that shows the budgeted expenses for area other than manufacturing is the ___________
and ______________ expense budget.
selling; administrative
 
When preparing a direct materials purchase budget, which of the following is needed to calculate the raw
materials to be purchased?
Beginning inventory of raw materials
Raw materials required per unit
 
__________  ________ is a plan for acquiring and using resources over a specified time period.
The budget
 
The __________ _________ budget shows the direct labor hours required to satisfy the production budget.
direct labor
 
What is usually the major source of receipts in the receipts section of the cash budget?
Sales
 
The production, purchases, inventories, and expense budgets all depend on the ___________ budget.
sales
 
The calculation of unit product cost requires information from which of the following budgets?
Manufacturing overhead budget
 
The direct labor budget is based on the _____________ budget.
production
 
A(n) __________ is a quantitative plan for acquiring and using resources over a specified time period
budget
 
Which of the following types of budgets keep managers focused one year ahead, so they do not become
too narrowly focused on short-term results?
Continuous
Perpetual
 
To calculate raw materials to be purchased on the direct materials budget, add the desired _________ inventory
of raw materials to the raw materials needed based on the _________ budget and _________ the beginning inventory
of raw materials to arrive at raw materials to be purchased.
ending, production, subtract
 
Variable selling and administrative expenses are calculated by multiplying the budgeted units _________ by
the variable selling and administrative expense per unit.
sold
 
Why should the budgeting process be taken seriously?
The budget sets the benchmarks used to evaluate departments.
The budget allocates resources to departments.
 
Expected cash collections consist of collections on credit sales made to customers in prior periods plus
collects on sales made in the current budget period.
cash
 
Developing goals and preparing various budgets to achieve those goals is part of the _________ process.
planning
 
A budgeted balance sheet is developed using data from the _________ of the budget period and data
contained in the various schedules.
beginning
 
The ending finished goods inventory budget computes the:
cost of unsold units
 
The beginning raw materials inventory for the year is the same as the beginning raw materials for which quarter?
First
 
In most companies, _________ is the most common significant noncash manufacturing overhead cost.
depreciation
 
If a budget initiated by top management has targets that are set too high:
motivation will suffer
 
Profit planning is accomplished by preparing a number of _________ that together form an integrated business plan.
budgets
 
What is added to the budgeted unit sales on a production budget to obtain the total number of units to be produced?
Desired ending inventory.
 
_________ involves developing goals for the budget, whereas _________ involves steps taken to ensure that
steps towards meeting the goal are being followed.
Planning; Control
 
A(n) _________  _________ budget shows the amount of goods for resale to be purchased from suppliers
during the period.
merchandise purchases
 
A manager who is unable to meet a budget that has been imposed from above can always say that the budget
was unrealistic and impossible to meet. With a(n) _________ -imposed budget, this excuse is not available.
self
 
Which of the following characterizes a stretch budget?
Very challenging
 
Which of the following is directly used in the cash disbursements schedule?
Payments for raw materials
 
To prepare a budgeted balance sheet as of December 31, 2012, data is needed from the:
balance sheet as of December 31, 2011.
 
What number does the direct materials budget take directly from the production budget?
Required production
 
A budget _________ is usually responsible for overall policy relating to the budget program and for coordinating
the preparation of the budget itself.
committee
 
Who has the most influence over lower-level managers’ attitudes towards a budget program?
Top executives
 
The first line of a merchandise purchases budget expressed in dollars is budgeted Blank______.
cost of goods sold
 
Which of the following statements is true?
Materials and labor budgets are based on the production budget.
 
Which of the following statements is false?
The human aspects of budgeting are not important to the process.
 
Which budget shows the amount of goods to be purchased from suppliers during the period?
Merchandise purchases budget
 
The unit product cost is needed to:
determine cost of goods sold on the budgeted income statement.
 
Operating budgets generally cover a _________ period.
one-year
 
n a manufacturing company, the _________ _________ budget details the raw materials that must be purchased
to fulfill the production budget and to provide for adequate inventories.
direct materials
 
Edison Corporation’s variable manufacturing overhead rate is $5.00 per direct labor-hour. Total budgeted fixed overhead
is $25,000 per month. The $25,000 per month includes $7,000 in depreciation expense. Total budgeted direct labor-hours
for the month of July is 20,000. Calculate the budgeted cash disbursement for manufacturing overhead for July.
$118,000
 
Budgeting is a technical process and human factors are not important.
False.
 
Standard costs can serve as a basis for evaluating actual performance.
False
 
Which of the following is NOT included on the sales budget?
Expected cash collections
Selling price per unit
Budgeted number of units to be sold
Desired ending inventory of units
 
Standard material, labor, and overhead costs can be obtained from standard cost tables published by the
Institute of Management Accountants.
False
 
Standard costs provide a basis for assessing the reasonableness of actual costs incurred for producing a product or service.
True
 
Standard costs provide a basis for assessing the reasonableness of actual costs incurred for producing a product or service.
True
 
In a manufacturing company, _________________ the budget is prepared right after the sales budget.
production
 
Working hours required to satisfy the production budget are shown on the Blank______ budget.
direct labor
 
Budgets:
communicate management's plan throughout the organization
 
In a manufacturing company, the _____ _____ budget details the raw materials that must be purchased to
fulfill the production budget and to provide for adequate inventories:
direct materials
 
Which of the following budgets are needed to calculate unit product costs:
direct labor budget
manufacturing overhead budget
direct materials budget
 
Which budget is a detailed schedule showing the expected sales for the budget period:
sales budget
 
In a manufacturing company, the ____ budget shows the number of units that must be manufactured to
satisfy needs and provide for the desired ending inventory:
production
 
In a manufacturing company, the ______ budget is prepared right after the sales budget:
production
 
An essential management tool that communicates management's plans throughout the organization,
allocates resources, and coordinates activities is called the _____ budget:
master
 
The selling and administrative expense budget ______.
estimates nonmanufacturing expenses
 
Which of the following budgets are directly based on information from the sales budget:
Production budget
Selling and administrative expense budget
 
Because it is needed for the schedule of expected cash collections, and the cash budget the annual master
budget file generally starts with the beginning _________ ____________.
balance sheet
 
The receipts section of the cash budget lists:
all cash inflows, except from financing
 
The underlying idea behind ____ accounting is that a manager should be held accountable for only those items
the manager can actually control:
responsibility
 
The purpose of a budget should be to:
establish goals
measure operating results
isolate areas needing attention
 
Working hours required to satisfy the production budget are shown on the ____ budget:
direct labor
 
All costs of production other than direct materials and direct labor are shown on the _____ _____ budget:
manufacturing overhead
 
A budgeted balance sheet is developed using data from the ______ of the budget period and data contained in the various schedules.
beginning
 
A budget prepared with the full cooperation of management at all levels is a ____ budget:
self-imposed
participative


The cost of unsold units is computed on the ____ budget:
ending finished goods inventory
 
Gathering feedback to ensure that the plan is being followed is referred to as ____:
control
 
To calculate raw materials to be purchased on the direct materials budget, add the desired _____ inventory of raw
materials to the raw materials needed based on the _____ budget and _____ the beginning inventory of raw
materials to arrive at raw materials to be purchased:
ending, production, deduct
 
Budgeted expenses for areas other than manufacturing are shown on the ____ budget:
selling and administrative
 
When a manager creates a budget that is too easy to attain, ____ occurs:
budgetary slack
 
The amount of goods to be acquired from suppliers during the period is shown on the ______ budget.
merchandise purchases
 
To calculate total sales on the sales budget, multiply budgeted sales in units by:
sales price per unit
 
Both the production and selling and administrative expense budgets are prepared using information directly from the ____ budget:
Sales
 
The direct labor budget is based directly on the ______ budget.
production
 
Master budget schedules:
are based on estimates and assumptions
answer several key questions for a company
 
A quantitative plan for acquiring and using resources over a specified time period is an _____:
Budget
 
When a manager creates a budget that is too easy to attain, ________ occur.
budgetary slack
 
A number of separate, but interdependent, budgets that formally lay out the company's sales, production,
and financial goals are contained in the __________ budget.
master
 
Which of the following is needed to calculate raw materials to be purchased on the direct materials budget:
beginning inventory of raw materials
raw materials required per unit
 
A company's planned net profit that serves as a benchmark against which subsequent company performance
can be measured is shown in the budgeted ____ ____:
income statement
 
What is subtracted from total budgeted selling and administrative expenses to determine the case
disbursements for selling and administrative expenses:
non-cash expenses
 
What is usually the major source of receipts in the receipts section of the cash budget:
Sales
 
The section on the cash budget that summarizes all cash payments that are planned for the budget period
is the cash ____ section:
disbursements
 
Which of the following types of budgets keep managers focused one year ahead, so they do not become
too narrowly focused on short-term results:
Continuous
Perpetual
 
Developing goals and preparing various budgets to achieve those goals is part of the ____ process:
planning
 
Collections on credit sales made to customers in prior periods plus collections on sales made in the current
budget period equals expected ____ collections:
cash
 
What would happen if a company penalized individuals for not meeting budgeted goals:
individuals would become too focused on meeting goals
individuals would add too much budgetary slack
 
Which of the following is not found in the financing section of the cash budget:
cash deficiency
 
Payments for direct materials, direct labor, and manufacturing overhead costs are all listed in
the ____ section of the cash budget:
disbursements
 
A budgeted balance sheet is developed using data from the ____ of the budget period and data contained in the
various schedules:
beginning
 
Highly achievable budget targets:
may generate greater management commitment to the budget
are used in most companies
may help build manager confidence
 
A detailed schedule showing the expected sales for the budget period is presented on the ________ budget.
sales
 
Which of the following budgets are directly based on information from the sales budget?
Selling and administrative expense budget
Production budget
 
In a manufacturing company, which budget is used as the basis for creating the direct materials budget, the direct
labor budget, and the manufacturing overhead budget?
Production
 
In a manufacturing company, the _________ budget is used to determine the budgets for manufacturing costs,
including the direct materials budget, the direct labor budget, and the manufacturing overhead budget.
Production
 
The cash budget _________.
is prepared near the end of the master budget process
 
A company's planned net profit that serves as a benchmark against which subsequent company performance
can be measured is shown on the budgeted ________ _________.
income statement
 
If inventory levels are ________, the result can lead to lost sales or last-minute, high-cost production efforts.
insufficient
 
The amount of goods to be acquired from suppliers during the period is shown on the ________ budget.
merchandise purchases
 
n a manufacturing company, the _________ budget details the raw materials that must be purchased to fulfill the
production budget and provide for adequate inventories
direct materials
 
Working hours required to satisfy the production budget are shown on the ________ budget.
direct labor
 
Risks of NOT knowing in advance how much labor time will be needed throughout the budget period includes ________.
labor shortages
erratic layoffs
low employee morale
 
All costs of production other than direct materials and direct labor are shown on the ________ budget.
manufacturing overhead
 
The ending finished goods inventory budget computes the ________ units.
cost of unsold
 
Budgeted expenses for area other than manufacturing are shown on the _______ budget.
selling and administrative
 
Variable selling and administrative expenses are calculated by multiplying the budgeted units __________ by
the variable selling and administrative expense per unit.
Sold
 
The receipts, disbursements, excess or deficiency, and financing section are all parts of the _______ budget.
cash

Homework  1.1 1.2  2.1 2.2  3.1 3.2  4.1 4.2 5.1 5.2  6.1 6.2  7.1  7.2  8.1  8.2  9.1   9.2  10.1  10.2  11.1  11.2  12.1 12.2  13.1  13.2  14.1  14.2  15.1   15.2
Learnsmart  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15   |  Exam  1  2  3  4  5  6  7  8  9  10  11  12   13  14  15  |  Final Exam 1   2    Homework Help?