Question 1

Which one of the following is a critical factor in budgeting for a service company?

Accepted Answer

A) coordinating professional staff needs with anticipated services 
B) determining how to allocate the disproportionate costs 
C) budgeting expenditures before anticipated receipts 
D) determining client needs 
A) coordinating professional staff needs with anticipated services 
B) determining how to allocate the disproportionate costs 
C) budgeting expenditures before anticipated receipts 
D) determining client needs

Question 2

Sudler Production is planning to sell 600 boxes of ceramic tile, with production estimated at 580 boxes during May.Each box of tile requires 44 kilograms of clay mix and a quarter hour of direct labour.Clay mix costs $0.50 per kilogram and employees of the company are paid $15.00 per hour.Manufacturing overhead is applied at a rate of 110% of direct labour costs.Sudler has 2,600 kilograms of clay mix in beginning inventory and wants to have 3,000 kilograms in ending inventory.What is the total amount to be budgeted for direct labour for the month?

Accepted Answer

A) $2,175 
B) $8,700 
C) $2,250 
D) $34,800 
A) $2,175 
B) $8,700 
C) $2,250 
D) $34,800

Question 3

Nextel Company showed the following on its direct materials budget for June: $\begin{array}{lr}
\text { Units to be produced } & 25,000 \
\text { Total kilograms needed for production } & 10,000 \
\text { Total kilograms of materials to be purchased } & 9,000
\end{array}$ The materials cost $2 per kilogram.How much is the cost of direct materials per unit?

Accepted Answer

A) $0.80 
B) $0.72 
C) $1.52 
D) $5.00 
A) $0.80 
B) $0.72 
C) $1.52 
D) $5.00

Question 4

At January 1, 2016, Barry, Inc.has beginning inventory of 5,000 widgets.Barry estimates it will sell 40,000 units during the first quarter of 2016 with a 5% increase in sales each quarter.Barry's policy is to maintain an ending inventory equal to 10% of the next quarter's sales.Each widget costs $2 and is sold for $3.How much is budgeted sales revenue for the third quarter of 2016?

Accepted Answer

A) $44,100 
B) $120,000 
C) $132,300 
D) $119,070 
A) $44,100 
B) $120,000 
C) $132,300 
D) $119,070

Question 5

Which of the following is NOT a characteristic of bottom-up budgeting?

Accepted Answer

A) It encourages organization-wide input into the process. 
B) It takes advantage of employees' intimate knowledge of operations when formulating plans. 
C) It is not as time consuming as top-down budgeting. 
D) It increases employees' commitment to achieving budget goals. 
A) It encourages organization-wide input into the process. 
B) It takes advantage of employees' intimate knowledge of operations when formulating plans. 
C) It is not as time consuming as top-down budgeting. 
D) It increases employees' commitment to achieving budget goals.

Question 6

The following credit sales are budgeted by Polex Electronics: $$\begin{array} { l r } 
\text { January } & \$ 124,000 \
\text { February } & 120,000 \
\text { March } & 135,000 \
\text { April } & 140,000 \
\text { May } & 142,000
\end{array}$$ The company's past experience indicates that 50% of the accounts receivable are collected in the month of sale, 30% in the month following the sale, and 18% in the second month following the sale.Two percent are uncollectible.How much does the company anticipate as cash receipts for March?

Accepted Answer

A) $132,300 
B) $125,820 
C) $135,060 
D) $122,300 
A) $132,300 
B) $125,820 
C) $135,060 
D) $122,300

Question 7

Budgetary slack means

Accepted Answer

A) management delays the completion of its annual budget to await important information. 
B) the budgetary process is not given a high priority in the company. 
C) the budget contains within it intentional under or over estimated items. 
D) the budget must be approved by too many senior levels of management before it is finalized. 
A) management delays the completion of its annual budget to await important information. 
B) the budgetary process is not given a high priority in the company. 
C) the budget contains within it intentional under or over estimated items. 
D) the budget must be approved by too many senior levels of management before it is finalized.

Question 8

Farley Company reported the following information for 2016: $\begin{array}{llcc}
&\underline{\text { September }} &\underline{\text { October }}& \underline{\text { November }}&\underline{\text { December }}&\underline{\text { January }}\
\text { Budgeted purchases }&\$90,000&\$120,000&\$128,000&\$144,000&\$88,000
\end{array}$
 Operating expenses are: Salaries, $50,000; Depreciation, $20,000; Rent, $10,000; Utilities, $14,000. 
-Operating expenses are paid during the month incurred.
-Accounts payable is used only for inventory acquisitions.
How much is the budgeted amount of cash to be paid for operating expenses in November?

Accepted Answer

A) $202,000 
B) $74,000 
C) $94,000 
D) $222,000 
A) $202,000 
B) $74,000 
C) $94,000 
D) $222,000

Question 9

The sales budget for the Johnson Company indicates the following units to be sold: $$\begin{array} { l l } 
\text { January } & 20,000 \
\text { February } & 30,000 \
\text { March } & 24,000 \
\text { April } & 28,000
\end{array}$$ The company requires that ending inventory be equivalent to 30% of the following month's sales.There were no units on hand at the end of December.What is the production that needs to take place during March?

Accepted Answer

A) 24,000 units 
B) 102,000 units 
C) 25,200 units 
D) 32,400 units 
A) 24,000 units 
B) 102,000 units 
C) 25,200 units 
D) 32,400 units

Question 10

Jason Company determined that the budgeted cost of producing a product is $1.20 per unit.On June 1, there were 11,000 units on hand.The sales department budgeted sales of 320,000 units in June.The company desires to have 8,000 units on hand on June 30.How much is the budgeted cost of goods manufactured for June?

Accepted Answer

A) $380,400 
B) $317,000 
C) $323,000 
D) $387,600 
A) $380,400 
B) $317,000 
C) $323,000 
D) $387,600

Question 11

The sales budget for the Johnson Company indicates the following units to be sold: $$\begin{array} { l l } 
\text { January } & 20,000 \
\text { February } & 30,000 \
\text { March } & 24,000 \
\text { April } & 28,000
\end{array}$$ The company requires that ending inventory be equivalent to 30% of the following month's sales.There were no units on hand at the end of December.What is the budgeted balance in the company's ending inventory account at March 31 expected to be?

Accepted Answer

A) 7,200 
B) 8,400 
C) 6,000 
D) 0 
A) 7,200 
B) 8,400 
C) 6,000 
D) 0

Question 12

Budgets represent management's plans in financial terms.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following approvals will make the most effective environment for budget acceptance?

Accepted Answer

A) The budget is prepared by top management. 
B) The budget preparation contains input from all levels of management. 
C) The budget is prepared by the department heads. 
D) Acceptance has nothing to do with who prepares budgets. 
A) The budget is prepared by top management. 
B) The budget preparation contains input from all levels of management. 
C) The budget is prepared by the department heads. 
D) Acceptance has nothing to do with who prepares budgets.

Question 14

Which one of the following is the correct formula for determining budgeted merchandise purchases?

Accepted Answer

A) budgeted sales + desired ending inventory - beginning inventory 
B) budgeted production - sales + beginning inventory - desired ending inventory 
C) budgeted sales - cost of goods sold + desired ending inventory - beginning inventory 
D) budgeted sales - cost of goods sold + beginning inventory - desired ending inventory 
A) budgeted sales + desired ending inventory - beginning inventory 
B) budgeted production - sales + beginning inventory - desired ending inventory 
C) budgeted sales - cost of goods sold + desired ending inventory - beginning inventory 
D) budgeted sales - cost of goods sold + beginning inventory - desired ending inventory

Question 15

The master budget contains which two classes of budgets?

Accepted Answer

A) the master budget and subsidiary budgets 
B) the primary and secondary budgets 
C) the historical and current budgets 
D) the operating budgets and financial budgets 
A) the master budget and subsidiary budgets 
B) the primary and secondary budgets 
C) the historical and current budgets 
D) the operating budgets and financial budgets

Question 16

Which of the following are the sections of the cash budget?

Accepted Answer

A) cash receipts, cash disbursements, financing 
B) cash receipts, cash disbursements, expenses 
C) capital expenditures, cash receipts, cash disbursements 
D) cash revenues, cash expenses, cash receipts, cash disbursements 
A) cash receipts, cash disbursements, financing 
B) cash receipts, cash disbursements, expenses 
C) capital expenditures, cash receipts, cash disbursements 
D) cash revenues, cash expenses, cash receipts, cash disbursements

Question 17

Which one of the following represents the correct order in which the budget documents listed for a manufacturing company would be prepared?

Accepted Answer

A) production budget, marketing budget, direct materials budget, indirect labour budget 
B) sales budget, cash budget, direct materials budget, direct labour budget 
C) selling and administrative expense budget, budgeted income statement, cash budget, budgeted balance sheet 
D) sales budget, cash budget, marketing budget, direct materials budget 
A) production budget, marketing budget, direct materials budget, indirect labour budget 
B) sales budget, cash budget, direct materials budget, direct labour budget 
C) selling and administrative expense budget, budgeted income statement, cash budget, budgeted balance sheet 
D) sales budget, cash budget, marketing budget, direct materials budget

Question 18

Jelly Box, Inc.budgeted the following manufacturing costs for 25,000 calculators: $\begin{array}{ll}
\text { Fixed manufacturing costs } & \$ 12,000 \text { per month } \
\text { Variable manufacturing costs } & \$ 16.00 \text { per unit }
\end{array}$ Jelly Box produced 20,000 calculators during March.How much are budgeted total manufacturing costs in March?

Accepted Answer

A) $320,000 
B) $412,000 
C) $400,000 
D) $332,000 
A) $320,000 
B) $412,000 
C) $400,000 
D) $332,000

Question 19

Upper level managers are responsible for preparing the entire budget.

Accepted Answer

A) True 
 B)False

Question 20

What three differences exist between long-range planning and budgeting?

Accepted Answer

A) amount of detail, content, and emphasis 
B) time periods involved, amount of detail, and content 
C) content, emphasis, and amount of detail 
D) emphasis, time periods involved, and amount of detail 
A) amount of detail, content, and emphasis 
B) time periods involved, amount of detail, and content 
C) content, emphasis, and amount of detail 
D) emphasis, time periods involved, and amount of detail

Which one of the following is a critical factor in budgeting for a service company?

Nextel Company showed the following on its direct materials budget for June: Units to be produced 25,000 Total kilograms needed for production 10,000 Total kilograms of materials to be purchased 9,000 The materials cost $2 per kilogram.How much is the cost of direct materials per unit?

Which of the following is NOT a characteristic of bottom-up budgeting?

Budgetary slack means

Budgets represent management's plans in financial terms.

Which of the following approvals will make the most effective environment for budget acceptance?

Which one of the following is the correct formula for determining budgeted merchandise purchases?

The master budget contains which two classes of budgets?

Which of the following are the sections of the cash budget?

Which one of the following represents the correct order in which the budget documents listed for a manufacturing company would be prepared?

Jelly Box, Inc.budgeted the following manufacturing costs for 25,000 calculators: Fixed manufacturing costs \ 12,000 per month Variable manufacturing costs \ 16.00 per unit Jelly Box produced 20,000 calculators during March.How much are budgeted total manufacturing costs in March?

Upper level managers are responsible for preparing the entire budget.

What three differences exist between long-range planning and budgeting?

Managerial Accounting

Managerial Cost Concepts and Cost Behaviour Analysis

Job-Order Cost Accounting

Process Cost Accounting

Activity-Based Costing

Decision-Making: Costvolumeprofit

Incremental Analysis

Alternative Inventory Costing Methods: a Decision-Making Perspective

Pricing

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Filters

Exam 10: Budgetary Planning

Which one of the following is a critical factor in budgeting for a service company?

Nextel Company showed the following on its direct materials budget for June: Units to be produced 25,000 Total kilograms needed for production 10,000 Total kilograms of materials to be purchased 9,000 The materials cost $2 per kilogram.How much is the cost of direct materials per unit?

Which of the following is NOT a characteristic of bottom-up budgeting?

Budgetary slack means

Budgets represent management's plans in financial terms.

Which of the following approvals will make the most effective environment for budget acceptance?

Which one of the following is the correct formula for determining budgeted merchandise purchases?

The master budget contains which two classes of budgets?

Which of the following are the sections of the cash budget?

Which one of the following represents the correct order in which the budget documents listed for a manufacturing company would be prepared?

Jelly Box, Inc.budgeted the following manufacturing costs for 25,000 calculators: Fixed manufacturing costs \ 12,000 per month Variable manufacturing costs \ 16.00 per unit Jelly Box produced 20,000 calculators during March.How much are budgeted total manufacturing costs in March?

Upper level managers are responsible for preparing the entire budget.

What three differences exist between long-range planning and budgeting?

Managerial Accounting

Managerial Cost Concepts and Cost Behaviour Analysis

Job-Order Cost Accounting

Process Cost Accounting

Activity-Based Costing

Decision-Making: Costvolumeprofit

Incremental Analysis

Alternative Inventory Costing Methods: a Decision-Making Perspective

Pricing

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Filters