Question 1

Which of the following is correct?

Accepted Answer

A) beginning raw material inventory + raw material required for production - desired ending raw material inventory = required raw material to be purchased. 
B) beginning raw material inventory + desired ending raw material inventory - raw material required for production = required raw material to be purchased. 
C) raw material required for production + beginning raw material inventory - desired ending raw material inventory = required raw material to be purchased. 
D) raw material required for production + desired ending raw material inventory - beginning raw material inventory = required raw material to be purchased. 
A) beginning raw material inventory + raw material required for production - desired ending raw material inventory = required raw material to be purchased. 
B) beginning raw material inventory + desired ending raw material inventory - raw material required for production = required raw material to be purchased. 
C) raw material required for production + beginning raw material inventory - desired ending raw material inventory = required raw material to be purchased. 
D) raw material required for production + desired ending raw material inventory - beginning raw material inventory = required raw material to be purchased.

Question 2

Jaunty Company is preparing its budgeted income statement for the upcoming year.The proper time to prepare this budget is

Accepted Answer

A) at the start of the budgetary process so that everyone knows the expected income for the year. 
B) once the sales budget has been done and approved. 
C) prior to the completion of the capital budget for the year. 
D) generally towards the end of the budgetary process when most other budgets have been approved. 
A) at the start of the budgetary process so that everyone knows the expected income for the year. 
B) once the sales budget has been done and approved. 
C) prior to the completion of the capital budget for the year. 
D) generally towards the end of the budgetary process when most other budgets have been approved.

Question 3

Which one of the following best describes a master budget?

Accepted Answer

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

Question 4

Each production worker can produce 5 wooden chairs per hour.During the month of June, Chairs, Inc.has forecasted sales of 100,000 chairs.The beginning inventory was 1,000 chairs, and desired ending inventory is 2,500 chairs.How many hours of direct labour must be budgeted to meet production needs?

Accepted Answer

A) 20,300 
B) 20,000 
C) 21,200 
D) 19,700 
A) 20,300 
B) 20,000 
C) 21,200 
D) 19,700

Question 5

One difference between a company's long-range planning efforts and its annual budget preparation is

Accepted Answer

A) long-range planning documents usually contain more detail than annual budgets. 
B) annual budgets usually contain more detail than the long-range planning process. 
C) long-range planning documents focus on the company's internal environment more than annual budgets. 
D) annual budgets focus on the external environment more than the long-range planning process. 
A) long-range planning documents usually contain more detail than annual budgets. 
B) annual budgets usually contain more detail than the long-range planning process. 
C) long-range planning documents focus on the company's internal environment more than annual budgets. 
D) annual budgets focus on the external environment more than the long-range planning process.

Question 6

The most common budget period is one year.

Accepted Answer

A) True 
 B)False

Question 7

Which one of the following helps improve the reliability of the sales forecast?

Accepted Answer

A) reduction of differences between actual and estimated amounts 
B) creation of management awareness 
C) consideration of industry trends 
D) extension of the budget period 
A) reduction of differences between actual and estimated amounts 
B) creation of management awareness 
C) consideration of industry trends 
D) extension of the budget period

Question 8

Sundy Company provided the following information for the month of August: $\begin{array}{ll}
\text { Beginning cash balance } & \$ 7,000 \
\text { Cash receipts } & 549,000 \
\text { Cash disbursements } & 523,000
\end{array}$ Sundy borrowed $15,000 and repaid $16,000 during the month.How much will Sundy's report on its budgeted balance sheet at August 31 for cash?

Accepted Answer

A) $32,000 
B) $33,000 
C) $26,000 
D) $25,000 
A) $32,000 
B) $33,000 
C) $26,000 
D) $25,000

Question 9

Use the following information for questions 
Livanos, Inc.reports all its sales on credit, and pays operating costs in the month incurred.Amounts for 2016 are: $$\begin{array} { l c c c c c } 
& \text { March } & \text { April } & \text { May } & \text { June } & \text { July } \
\text { Budgeted sales } & \$ 300,000 & \$ 290,000 & \$ 320,000 & \$ 280,000 & \$ 210,000 \
\text { Budgeted purchases } & \$ 144,000 & \$ 120,000 & \$ 128,000 & \$ 132,000 & \$ 90,000
\end{array}$$ Customer amounts on account are collected 70% in the month of sale and 30% in the following month.
-Cost of goods sold is 60% of sales.
-Livanos purchases and pays for merchandise 40% in the month of acquisition and 60% in the following month.
-Operating expenses are: Salaries, $50,000; Depreciation, $12,000; Rent, $15,000; and Utilities, $14,000.
-Accounts payable is used only for inventory acquisitions.
-How much is Livanos' budgeted balance for Accounts Payable at May 31, 2016?

Accepted Answer

A) $124,800 
B) $72,000 
C) $51,200 
D) $76,800 
A) $124,800 
B) $72,000 
C) $51,200 
D) $76,800

Question 10

How does long-range planning compare to a master budget?

Accepted Answer

A) It focuses on meeting profit objectives instead of strategies to achieve those goals. 
B) It is less detailed than an annual budget. 
C) It is prepared by the president, unlike a master budget which is prepared by a budget committee. 
D) It generally encompasses a shorter period of time than a master budget. 
A) It focuses on meeting profit objectives instead of strategies to achieve those goals. 
B) It is less detailed than an annual budget. 
C) It is prepared by the president, unlike a master budget which is prepared by a budget committee. 
D) It generally encompasses a shorter period of time than a master budget.

Question 11

Which one of the following is a problem resulting from a service company being overstaffed?

Accepted Answer

A) Labour costs will be disproportionately low. 
B) Profits will be higher because of the additional salaries. 
C) Staff turnover may increase. 
D) Revenue may be lost. 
A) Labour costs will be disproportionately low. 
B) Profits will be higher because of the additional salaries. 
C) Staff turnover may increase. 
D) Revenue may be lost.

Question 12

Budgeting and long-range planning differ in the emphasis and the time period involved.

Accepted Answer

A) True 
 B)False

Question 13

What is true of budgets?

Accepted Answer

A) They are voted on and approved by shareholders. 
B) They are used in the planning, but not the control process. 
C) There is a standard form and structure for budgets. 
D) They are used in performance evaluation. 
A) They are voted on and approved by shareholders. 
B) They are used in the planning, but not the control process. 
C) There is a standard form and structure for budgets. 
D) They are used in performance evaluation.

Question 14

Spirit, Inc.budgeted sales are 433,000 units for January and 420,000 units for February.The company's policy requires maintaining units on hand at the end of each month equal to 8% of next month's budgeted unit sales.How many units should the company produce in January?

Accepted Answer

A) 442,700 units 
B) 423,300 units 
C) 466,600 units 
D) 431,960 units 
A) 442,700 units 
B) 423,300 units 
C) 466,600 units 
D) 431,960 units

Question 15

Companies can use either a predetermined overhead rate or a manufacturing overhead budget.

Accepted Answer

A) True 
 B)False

Question 16

What is the last step in developing the master budget?

Accepted Answer

A) preparing the budgeted balance sheet 
B) preparing the cost of goods manufactured budget 
C) preparing the budgeted income statement 
D) preparing the cash budget 
A) preparing the budgeted balance sheet 
B) preparing the cost of goods manufactured budget 
C) preparing the budgeted income statement 
D) preparing the cash budget

Question 17

Which one of the following includes people who normally make up the budget committee?

Accepted Answer

A) sales manager, company president, company treasurer 
B) company treasurer, creditors, controller 
C) sales manager, controller, investors 
D) external auditors, controller, treasurer 
A) sales manager, company president, company treasurer 
B) company treasurer, creditors, controller 
C) sales manager, controller, investors 
D) external auditors, controller, treasurer

Question 18

Which statement is true concerning budgeting in not-for-profit organizations?

Accepted Answer

A) It is not necessary since the goal is not profit-oriented. 
B) It usually starts with budgeting receipts, following by expenditures. 
C) It is based on cash flows rather than revenues and expenses. 
D) The budget must be approved by the shareholders. 
A) It is not necessary since the goal is not profit-oriented. 
B) It usually starts with budgeting receipts, following by expenditures. 
C) It is based on cash flows rather than revenues and expenses. 
D) The budget must be approved by the shareholders.

Question 19

Scobee Company's cash budget showed total available cash less cash disbursements.What does this amount equal?

Accepted Answer

A) ending cash balance 
B) total cash receipts 
C) the excess (deficiency)of available cash over cash disbursements 
D) the amount of financing required 
A) ending cash balance 
B) total cash receipts 
C) the excess (deficiency)of available cash over cash disbursements 
D) the amount of financing required

Question 20

Which one of the following sections appears on a cash budget?

Accepted Answer

A) Expenses 
B) Financing 
C) Revenues 
D) Sales 
A) Expenses 
B) Financing 
C) Revenues 
D) Sales

Which of the following is correct?

Jaunty Company is preparing its budgeted income statement for the upcoming year.The proper time to prepare this budget is

Which one of the following best describes a master budget?

Each production worker can produce 5 wooden chairs per hour.During the month of June, Chairs, Inc.has forecasted sales of 100,000 chairs.The beginning inventory was 1,000 chairs, and desired ending inventory is 2,500 chairs.How many hours of direct labour must be budgeted to meet production needs?

One difference between a company's long-range planning efforts and its annual budget preparation is

The most common budget period is one year.

Which one of the following helps improve the reliability of the sales forecast?

Sundy Company provided the following information for the month of August: Beginning cash balance \ 7,000 Cash receipts 549,000 Cash disbursements 523,000 Sundy borrowed $15,000 and repaid $16,000 during the month.How much will Sundy's report on its budgeted balance sheet at August 31 for cash?

How does long-range planning compare to a master budget?

Which one of the following is a problem resulting from a service company being overstaffed?

Budgeting and long-range planning differ in the emphasis and the time period involved.

What is true of budgets?

Spirit, Inc.budgeted sales are 433,000 units for January and 420,000 units for February.The company's policy requires maintaining units on hand at the end of each month equal to 8% of next month's budgeted unit sales.How many units should the company produce in January?

Companies can use either a predetermined overhead rate or a manufacturing overhead budget.

What is the last step in developing the master budget?

Which one of the following includes people who normally make up the budget committee?

Which statement is true concerning budgeting in not-for-profit organizations?

Scobee Company's cash budget showed total available cash less cash disbursements.What does this amount equal?

Which one of the following sections appears on a cash budget?

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 of the following is correct?

Jaunty Company is preparing its budgeted income statement for the upcoming year.The proper time to prepare this budget is

Which one of the following best describes a master budget?

Each production worker can produce 5 wooden chairs per hour.During the month of June, Chairs, Inc.has forecasted sales of 100,000 chairs.The beginning inventory was 1,000 chairs, and desired ending inventory is 2,500 chairs.How many hours of direct labour must be budgeted to meet production needs?

One difference between a company's long-range planning efforts and its annual budget preparation is

The most common budget period is one year.

Which one of the following helps improve the reliability of the sales forecast?

Sundy Company provided the following information for the month of August: Beginning cash balance \ 7,000 Cash receipts 549,000 Cash disbursements 523,000 Sundy borrowed $15,000 and repaid $16,000 during the month.How much will Sundy's report on its budgeted balance sheet at August 31 for cash?

How does long-range planning compare to a master budget?

Which one of the following is a problem resulting from a service company being overstaffed?

Budgeting and long-range planning differ in the emphasis and the time period involved.

What is true of budgets?

Spirit, Inc.budgeted sales are 433,000 units for January and 420,000 units for February.The company's policy requires maintaining units on hand at the end of each month equal to 8% of next month's budgeted unit sales.How many units should the company produce in January?

Companies can use either a predetermined overhead rate or a manufacturing overhead budget.

What is the last step in developing the master budget?

Which one of the following includes people who normally make up the budget committee?

Which statement is true concerning budgeting in not-for-profit organizations?

Scobee Company's cash budget showed total available cash less cash disbursements.What does this amount equal?

Which one of the following sections appears on a cash budget?

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