Question 1

An overly optimistic sales budget may result in

Accepted Answer

A) increases in selling prices late in the year. 
B) insufficient inventories. 
C) increased sales during the year. 
D) excessive inventories. 
A) increases in selling prices late in the year. 
B) insufficient inventories. 
C) increased sales during the year. 
D) excessive inventories.

Question 2

Comma Manufacturing budgets on an annual basis for its fiscal year.The following beginning and ending inventory levels are planned for the fiscal year of July 1, 2012 to June 30, 2013: $\begin{array}{ll}
&\text { June 30, } 2013& \text { June 30, } 2012\
\text { Raw Materials } & 3,000 \text { kilos }& 2,000 \text { kilos }
\end{array}$
 Three kilos of raw materials are needed to produce each unit of finished product.If Comma Manufacturing plans to produce 560,000 units during the 2012-2013 fiscal year, how many kilos of materials will the company need to purchase for its production during the year?

Accepted Answer

A) 1,681,000 
B) 1,686,000 
C) 1,680,000 
D) 1,678,000 
A) 1,681,000 
B) 1,686,000 
C) 1,680,000 
D) 1,678,000

Question 3

Bean Manufacturing reported the following information for 2013: $\begin{array}{ll}&\text { October}&\text { November }&\text {December }\
\text { Budgeted purchases } & \$ 240,000 & \$ 256,000 &\$ 288,000
\end{array}$
 Operating expenses are: Salaries, $100,000; Depreciation, $40,000; Rent, $20,000; Utilities, $28,000 
-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) $404,000 
B) $148,000 
C) $188,000 
D) $444,000 
A) $404,000 
B) $148,000 
C) $188,000 
D) $444,000

Question 4

Which of the following statements about budget acceptance in an organization is true?

Accepted Answer

A) The most widely accepted budget by the organization is the one prepared by top management. 
B) The most widely accepted budget by the organization is the one prepared by the department heads. 
C) Budgets are hardly ever accepted by anyone except top management. 
D) Budgets have a greater chance of acceptance if all levels of management have provided input into the budgeting process. 
A) The most widely accepted budget by the organization is the one prepared by top management. 
B) The most widely accepted budget by the organization is the one prepared by the department heads. 
C) Budgets are hardly ever accepted by anyone except top management. 
D) Budgets have a greater chance of acceptance if all levels of management have provided input into the budgeting process.

Question 5

If a monthly cash budget is prepared properly, there will never be a cash deficiency at the end of any month.

Accepted Answer

A) True 
 B)False

Question 6

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 7

A budget is most likely to be effective if

Accepted Answer

A) it is used to assess blame when things do not occur according to plans. 
B) it is not used to evaluate a manager's performance. 
C) employees and managers at the lower levels do not get involved in the budgeting process. 
D) it has top management support. 
A) it is used to assess blame when things do not occur according to plans. 
B) it is not used to evaluate a manager's performance. 
C) employees and managers at the lower levels do not get involved in the budgeting process. 
D) it has top management support.

Question 8

The manufacturing overhead budget generally has separate sections for variable, mixed, and fixed costs.

Accepted Answer

A) True 
 B)False

Question 9

A critical factor in budgeting for a service firm is to determine the amount of products to purchase.

Accepted Answer

A) True 
 B)False

Question 10

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 manufactured for June would be

Accepted Answer

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

Question 11

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 12

Long-range planning usually encompasses a period of at least

Accepted Answer

A) six months. 
B) 1 year. 
C) 5 years. 
D) 10 years. 
A) six months. 
B) 1 year. 
C) 5 years. 
D) 10 years.

Question 13

The master budget reflects management's long-term plans encompassing five years or more.

Accepted Answer

A) True 
 B)False

Question 14

Burr, Inc.'s direct materials budget shows total cost of direct materials purchases for April $400,000, May $480,000 and June $560,000.Cash payments are 60% in the month of purchase and 40% in the following month.The budgeted cash payments for June are

Accepted Answer

A) $528,000. 
B) $512,000. 
C) $480,000. 
D) $416,000. 
A) $528,000. 
B) $512,000. 
C) $480,000. 
D) $416,000.

Question 15

The flow of input data for budgeting should be from the highest levels of responsibility to the lowest.

Accepted Answer

A) True 
 B)False

Question 16

The budget itself and the administration of the budget are the responsibility of the accounting department.

Accepted Answer

A) True 
 B)False

Question 17

A purchases budget is used instead of a production budget by

Accepted Answer

A) merchandising companies. 
B) service enterprises. 
C) not-for-profit organizations. 
D) manufacturing companies. 
A) merchandising companies. 
B) service enterprises. 
C) not-for-profit organizations. 
D) manufacturing companies.

Question 18

It is important that budgets be accepted by

Accepted Answer

A) division managers. 
B) department heads. 
C) supervisors. 
D) All of these. 
A) division managers. 
B) department heads. 
C) supervisors. 
D) All of these.

Question 19

The manufacturing overhead budget shows the expected manufacturing overhead costs.

Accepted Answer

A) True 
 B)False

Question 20

The direct materials budget shows: $\begin{array}{ll}
\text { Desired ending direct materials } & 48,000 \text { pounds } \
\text { Total materials required } & 69,000 \text { pounds } \
\text { Direct materials purchases } & 63,200 \text { pounds }
\end{array}$ The total direct materials needed for production is

Accepted Answer

A) 21,000 pounds. 
B) 5,800 pounds. 
C) 15,200 pounds. 
D) 132,200 pounds. 
A) 21,000 pounds. 
B) 5,800 pounds. 
C) 15,200 pounds. 
D) 132,200 pounds.

An overly optimistic sales budget may result in

Which of the following statements about budget acceptance in an organization is true?

If a monthly cash budget is prepared properly, there will never be a cash deficiency at the end of any month.

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.

A budget is most likely to be effective if

The manufacturing overhead budget generally has separate sections for variable, mixed, and fixed costs.

A critical factor in budgeting for a service firm is to determine the amount of products to purchase.

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.

Long-range planning usually encompasses a period of at least

The master budget reflects management's long-term plans encompassing five years or more.

Burr, Inc.'s direct materials budget shows total cost of direct materials purchases for April $400,000, May $480,000 and June $560,000.Cash payments are 60% in the month of purchase and 40% in the following month.The budgeted cash payments for June are

The flow of input data for budgeting should be from the highest levels of responsibility to the lowest.

The budget itself and the administration of the budget are the responsibility of the accounting department.

A purchases budget is used instead of a production budget by

It is important that budgets be accepted by

The manufacturing overhead budget shows the expected manufacturing overhead costs.

The direct materials budget shows: Desired ending direct materials 48,000 pounds Total materials required 69,000 pounds Direct materials purchases 63,200 pounds The total direct materials needed for production is

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: the Big Picture

Managerial Accounting

Time Value of Money and Present Value Calculations

Filters

Exam 9: Reporting and Analyzing Long-Lived Assets

An overly optimistic sales budget may result in

Which of the following statements about budget acceptance in an organization is true?

If a monthly cash budget is prepared properly, there will never be a cash deficiency at the end of any month.

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.

A budget is most likely to be effective if

The manufacturing overhead budget generally has separate sections for variable, mixed, and fixed costs.

A critical factor in budgeting for a service firm is to determine the amount of products to purchase.

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.

Long-range planning usually encompasses a period of at least

The master budget reflects management's long-term plans encompassing five years or more.

Burr, Inc.'s direct materials budget shows total cost of direct materials purchases for April $400,000, May $480,000 and June $560,000.Cash payments are 60% in the month of purchase and 40% in the following month.The budgeted cash payments for June are

The flow of input data for budgeting should be from the highest levels of responsibility to the lowest.

The budget itself and the administration of the budget are the responsibility of the accounting department.

A purchases budget is used instead of a production budget by

It is important that budgets be accepted by

The manufacturing overhead budget shows the expected manufacturing overhead costs.

The direct materials budget shows: Desired ending direct materials 48,000 pounds Total materials required 69,000 pounds Direct materials purchases 63,200 pounds The total direct materials needed for production is

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: the Big Picture

Managerial Accounting

Time Value of Money and Present Value Calculations

Filters