Question 1

The amounts to be included in the standard price of direct labor are generally provided by

Accepted Answer

A) each employee's supervisor. 
B) the human resources department. 
C) the plant manager. 
D) the controller. 
A) each employee's supervisor. 
B) the human resources department. 
C) the plant manager. 
D) the controller.

Question 2

In order to prepare the sales budget, one needs the number of units

Accepted Answer

A) expected to be produced and the prices expected to be charged. 
B) expected to be sold and the cost of producing each unit. 
C) expected to be sold and the prices expected to be charged. 
D) sold in the previous period and the price charged for the units. 
A) expected to be produced and the prices expected to be charged. 
B) expected to be sold and the cost of producing each unit. 
C) expected to be sold and the prices expected to be charged. 
D) sold in the previous period and the price charged for the units.

Question 3

An ideal standard signifies

Accepted Answer

A) perfection. 
B) realistic projections. 
C) attainable goals. 
D) padding. 
A) perfection. 
B) realistic projections. 
C) attainable goals. 
D) padding.

Question 4

Cooper Company, a retailer of camping supplies has budgeted activity for January using the following data:   Required:
What is Cooper's budgeted cash disbursements for January?

Accepted Answer

The answer of Cooper Company, a retailer of camping supplies...

Question 5

Trail Industries is preparing its cash budget for the third quarter of the current year.Sales for the third quarter are budgeted at $870,000 ($290,000 per month).Sales are 80% cash, with the remaining 20% on credit which is collected in the month following the month of sale.On June 30, the cash balance is $48,000, and the Accounts Receivable (all related to June sales) balance is $51,000.Operating expenses for the quarter are budgeted at $464,000, which includes $18,000 of depreciation.Cash expenses are paid in the month incurred.Cash purchases for merchandise inventory are budgeted at $392,000 for the quarter.What is the projected cash balance at the end of the third quarter?

Accepted Answer

A) $113,000 
B) $73,000 
C) $4,000 
D) $131,000 
A) $113,000 
B) $73,000 
C) $4,000 
D) $131,000

Question 6

The amounts to be included in the standard price of direct labor are generally determined by

Accepted Answer

A) each employee's supervisor. 
B) the plant manager. 
C) the payroll department. 
D) the CFO. 
A) each employee's supervisor. 
B) the plant manager. 
C) the payroll department. 
D) the CFO.

Question 7

Which of the following is not a component of the master budget?

Accepted Answer

A) Indirect cost budget 
B) Direct material purchases budget 
C) Ending inventory and cost of goods sold budget 
D) Production budget 
A) Indirect cost budget 
B) Direct material purchases budget 
C) Ending inventory and cost of goods sold budget 
D) Production budget

Question 8

In setting the direct labor quantity standard, estimated time can be derived from

Accepted Answer

A) published labor rates in benchmark studies. 
B) time-and-motion studies. 
C) union contracts. 
D) payroll records. 
A) published labor rates in benchmark studies. 
B) time-and-motion studies. 
C) union contracts. 
D) payroll records.

Question 9

Assume you have just been hired by a large manufacturing company and have been assigned to a team that has the responsibility of gathering the data for completing the company's operating budget.Your first assignment is to make the initial contact with the department managers who will be providing data to ensure that everyone involved knows the importance of preparing a realistic budget.The first manager you approach does not appear to know what an operating budget is and apparently is not interested in assisting your team in preparing a meaningful budget.Prepare a written memo to the managers explaining what the operating budget is, its components, and its importance.

Accepted Answer

Date
To: Department Managers
From: Your

Question 10

A bottom-up budget approach is also referred to as

Accepted Answer

A) participative budgeting. 
B) imposed budgeting. 
C) responsibility budgeting. 
D) reverse budgeting. 
A) participative budgeting. 
B) imposed budgeting. 
C) responsibility budgeting. 
D) reverse budgeting.

Question 11

Copper, Inc.'s intern was preparing the cash budget for May.Copper's beginning inventory was $12,600 and its ending inventory was $12,000.If cost of goods sold is 55% of sales, what was the amount of budgeted monthly sales (if necessary, round your answer to the nearest dollar)?

Accepted Answer

A) $350,000 
B) $243,000 
C) $240,818 
D) $73,508 
A) $350,000 
B) $243,000 
C) $240,818 
D) $73,508

Question 12

Since the cash budget drives all other components of the master budget, it is imperative that it be as realistic as possible.

Accepted Answer

A) True 
 B)False

Question 13

Jody Jewelry manufactures jewelry.In October Jody is planning to make 500 rings, 400 bracelets, and 210 pendants.Each ring requires 3 ounces of gold and 2 semi-precious stones.Each bracelet requires 4 ounces of gold and 4 semi-precious stones.Each pendant requires 3.5 ounces of gold and 1 semi-precious stone.The company can purchase the 10k gold it uses in its manufacturing for $215 an ounce, and can purchase a lot of 100 semi-precious stones for $3,080.What is the standard cost for direct materials per pendant?

Accepted Answer

A) $245.80 
B) $783.30 
C) $752.50 
D) $3,295.00 
A) $245.80 
B) $783.30 
C) $752.50 
D) $3,295.00

Question 14

Which of the following is not a consequence of budgetary slack?

Accepted Answer

A) Resources may not be allocated in the optimal way. 
B) Those who implement the budget may engage in undesirable behavior because they had input into setting the budget. 
C) Managers may receive bonuses they would not have earned if the budget had been prepared realistically. 
D) The pro-forma budgets may not be representative of actual expectations. 
A) Resources may not be allocated in the optimal way. 
B) Those who implement the budget may engage in undesirable behavior because they had input into setting the budget. 
C) Managers may receive bonuses they would not have earned if the budget had been prepared realistically. 
D) The pro-forma budgets may not be representative of actual expectations.

Question 15

Go-Spa Enterprises is a portable hot tub manufacturer.The company produces both 2-person and 4-person hot tubs.John Ireland, the company's sales manager, prepared the following sales forecast for 2021.The forecasted sales prices include a 5 percent increase in the 2-person spa price and a 10 percent increase in the 4-person spa price, to cover anticipated increases in raw materials prices.   Required: 
a.Prepare Go-Spa's sales budget for 2021.Omit the heading.
b.On December 31, 2020, Go-Spa had 80 2-person spas in stock-fewer than the desired inventory level of 100, based on the following quarter's sales.The company has budgeted for sales of 450 2-person spas in the first quarter of 2022.Prepare the 2021 production budget for 2-person spas.Omit the heading.
c.Each 2-person spa requires a pump motor, which Go-Spa purchases for $160.On December 31, 2020, Go Spa had 400 pump motors in inventory.Damage during the installation process results in a standard quantity of 1.2 motors per spa.Because of recent delivery problems, Go-Spa wants to maintain an ending inventory equal to 50 percent of the following quarter's production needs.Since the supplier has assured Go-Spa that the delivery issues will be resolved by the end of December, Go-Spa wants only 300 motors in inventory on December 31, 2021.Prepare the purchases budget for motors for 2021.

Accepted Answer

The answer of Go-Spa Enterprises is a portable hot tub...

Question 16

Which of the following is not a characteristic of a rolling budget?

Accepted Answer

A) This method of budgeting always includes 12 months of data. 
B) As one month ends, it is removed from the budget and the entire budget rolls forward one month. 
C) At the beginning of the budget period, management breaks down only the first quarter into months. 
D) It requires a top-down approach. 
A) This method of budgeting always includes 12 months of data. 
B) As one month ends, it is removed from the budget and the entire budget rolls forward one month. 
C) At the beginning of the budget period, management breaks down only the first quarter into months. 
D) It requires a top-down approach.

Question 17

The master budget is a collection of smaller budgets that lead to pro-forma financial statements.

Accepted Answer

A) True 
 B)False

Question 18

Budgetary slack is also referred to as

Accepted Answer

A) budgetary padding. 
B) bottom-up slack. 
C) top-down slack. 
D) tactical planning. 
A) budgetary padding. 
B) bottom-up slack. 
C) top-down slack. 
D) tactical planning.

Question 19

Which of the following is not a step in preparing the manufacturing overhead budget?

Accepted Answer

A) Enter the total estimated overhead from the previous period. 
B) Calculate the variable overhead cost per period using the variable rate and the budgeted activity base. 
C) Subtract the non-cash overhead items from the total overhead cost to determine cash payments for overhead. 
D) Calculate the total overhead cost for the period by adding the fixed and variable overhead costs. 
A) Enter the total estimated overhead from the previous period. 
B) Calculate the variable overhead cost per period using the variable rate and the budgeted activity base. 
C) Subtract the non-cash overhead items from the total overhead cost to determine cash payments for overhead. 
D) Calculate the total overhead cost for the period by adding the fixed and variable overhead costs.

Question 20

Which of the following use information from the selling and administrative expense budget?

Accepted Answer

A) Manufacturing overhead budget and cash budget 
B) Budgeted income statement and cash budget 
C) Cash budget and budgeted balance sheet 
D) Production budget and budgeted income statement. 
A) Manufacturing overhead budget and cash budget 
B) Budgeted income statement and cash budget 
C) Cash budget and budgeted balance sheet 
D) Production budget and budgeted income statement.

The amounts to be included in the standard price of direct labor are generally provided by

In order to prepare the sales budget, one needs the number of units

An ideal standard signifies

Cooper Company, a retailer of camping supplies has budgeted activity for January using the following data: Required: What is Cooper's budgeted cash disbursements for January?

The amounts to be included in the standard price of direct labor are generally determined by

Which of the following is not a component of the master budget?

In setting the direct labor quantity standard, estimated time can be derived from

A bottom-up budget approach is also referred to as

Copper, Inc.'s intern was preparing the cash budget for May.Copper's beginning inventory was $12,600 and its ending inventory was $12,000.If cost of goods sold is 55% of sales, what was the amount of budgeted monthly sales (if necessary, round your answer to the nearest dollar)?

Since the cash budget drives all other components of the master budget, it is imperative that it be as realistic as possible.

Which of the following is not a consequence of budgetary slack?

Which of the following is not a characteristic of a rolling budget?

The master budget is a collection of smaller budgets that lead to pro-forma financial statements.

Budgetary slack is also referred to as

Which of the following is not a step in preparing the manufacturing overhead budget?

Which of the following use information from the selling and administrative expense budget?

Accounting As a Tool for Management

Cost Behavior and Cost Estimation

Costvolumeprofit Analysis and Pricing Decisions

Product Costs and Job Order Costing

Performance Evaluation: Variance Analysis

Activity-Based Costing and Activity-Based Management

Using Accounting Information to Make Managerial Decisions

Using Accounting Information to Make Managerial Decisions

Capital Budgeting

Decentralization and Performance Evaluation

Performance Evaluation Revisited: a Balanced Approach

Financial Statement Analysis

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Exam 5: Planning and Forecasting in a Manufacturing Setting

The amounts to be included in the standard price of direct labor are generally provided by

In order to prepare the sales budget, one needs the number of units

An ideal standard signifies

Cooper Company, a retailer of camping supplies has budgeted activity for January using the following data: Required: What is Cooper's budgeted cash disbursements for January?

The amounts to be included in the standard price of direct labor are generally determined by

Which of the following is not a component of the master budget?

In setting the direct labor quantity standard, estimated time can be derived from

A bottom-up budget approach is also referred to as

Copper, Inc.'s intern was preparing the cash budget for May.Copper's beginning inventory was $12,600 and its ending inventory was $12,000.If cost of goods sold is 55% of sales, what was the amount of budgeted monthly sales (if necessary, round your answer to the nearest dollar)?

Since the cash budget drives all other components of the master budget, it is imperative that it be as realistic as possible.

Which of the following is not a consequence of budgetary slack?

Which of the following is not a characteristic of a rolling budget?

The master budget is a collection of smaller budgets that lead to pro-forma financial statements.

Budgetary slack is also referred to as

Which of the following is not a step in preparing the manufacturing overhead budget?

Which of the following use information from the selling and administrative expense budget?

Accounting As a Tool for Management

Cost Behavior and Cost Estimation

Costvolumeprofit Analysis and Pricing Decisions

Product Costs and Job Order Costing

Performance Evaluation: Variance Analysis

Activity-Based Costing and Activity-Based Management

Using Accounting Information to Make Managerial Decisions

Using Accounting Information to Make Managerial Decisions

Capital Budgeting

Decentralization and Performance Evaluation

Performance Evaluation Revisited: a Balanced Approach

Financial Statement Analysis

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