Question 1

The difference in standard price and standard cost of direct material is that

Accepted Answer

A) standard price is the amount to produce one unit of product; standard cost is the amount paid to obtain one unit of material from a vendor. 
B) standard price is the amount paid to obtain one unit of material from a vendor; standard cost is the amount to produce one unit of product. 
C) standard price is the amount added to work in process as material is put into production; standard cost is the amount to produce one unit of product. 
D) standard price is the amount to produce one unit of product; standard cost is the amount added to work in process as material is put into production. 
A) standard price is the amount to produce one unit of product; standard cost is the amount paid to obtain one unit of material from a vendor. 
B) standard price is the amount paid to obtain one unit of material from a vendor; standard cost is the amount to produce one unit of product. 
C) standard price is the amount added to work in process as material is put into production; standard cost is the amount to produce one unit of product. 
D) standard price is the amount to produce one unit of product; standard cost is the amount added to work in process as material is put into production.

Question 2

Information from the manufacturing overhead budget flows to the

Accepted Answer

A) direct materials purchases budget. 
B) cash budget. 
C) production budget. 
D) sales budget. 
A) direct materials purchases budget. 
B) cash budget. 
C) production budget. 
D) sales budget.

Question 3

Which of the following is not a characteristic of a bottom-up budget environment?

Accepted Answer

A) Executive management creates the budget. 
B) At each higher level of management, the budget is reviewed and may be altered. 
C) The budget approach may also be referred to as participative budgeting. 
D) All of these answer choices are characteristics of a bottom-up budget environment. 
A) Executive management creates the budget. 
B) At each higher level of management, the budget is reviewed and may be altered. 
C) The budget approach may also be referred to as participative budgeting. 
D) All of these answer choices are characteristics of a bottom-up budget environment.

Question 4

Practical standards represent a level of performance that can be attained with reasonable effort.

Accepted Answer

A) True 
 B)False

Question 5

Accountants at Shell Company have prepared the sales budget for the first quarter of the upcoming year.February sales are budgeted at $175,000.All sales are made on credit.The cash receipts budget for March shows total cash receipts equal to $148,390.Shell grants a 2% discount to customers who pay within 10 days of the invoice.Shell collects 60% of sales within the discount period, 20% in the month of sale but outside the discount period, 15% in the month following sale and the remainder is uncollectible.What are the budgeted sales for March (if necessary, round your answer to the nearest dollar)?

Accepted Answer

A) $193,958 
B) $221,625 
C) $155,000 
D) $314,795 
A) $193,958 
B) $221,625 
C) $155,000 
D) $314,795

Question 6

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 bracelet?

Accepted Answer

A) $338.20 
B) $983.20 
C) $890.80 
D) $245.80 
A) $338.20 
B) $983.20 
C) $890.80 
D) $245.80

Question 7

Which of the following is not a characteristic of a top-down budget environment?

Accepted Answer

A) Executive management creates the budget. 
B) This approach is referred to as participative budgeting. 
C) The budget is pushed down through the organization. 
D) All of these answer choices are characteristics of a top-down budget environment. 
A) Executive management creates the budget. 
B) This approach is referred to as participative budgeting. 
C) The budget is pushed down through the organization. 
D) All of these answer choices are characteristics of a top-down budget environment.

Question 8

Performance-standard setting is not an exact science, but there are some hard and fast criterion for proving one standard right and the other one wrong.

Accepted Answer

A) True 
 B)False

Question 9

The terms standard price and standard cost can be used interchangeably.

Accepted Answer

A) True 
 B)False

Question 10

Simple Styles is a dress manufacturer.The company purchases fabric with a list price of $200 per bolt and pays shipping charges of $3 per bolt.Each bolt contains 100 yards of fabric.Simply Styles receives a volume discount of 15% per bolt.Each dress uses a standard quantity of 2 yards of fabric.
Required:
Calculate the standard cost of material for one dress.

Accepted Answer

[$200 + $3 - ($200 × .15)] = $

Question 11

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

Accepted Answer

A) Cash available to spend 
B) Short-term financing 
C) Reconciliation of beginning and ending cash 
D) Cash disbursements 
A) Cash available to spend 
B) Short-term financing 
C) Reconciliation of beginning and ending cash 
D) Cash disbursements

Question 12

As a service to the public, the accounting department at a major university provides speakers for budgeting seminars at functions such as club meetings, couples' retreats, and at several local half-way houses and women's shelters.Speakers, who hold doctorate degrees in accounting, are paid by the college of business an hourly rate of $75 plus fringe benefits estimated at 30% of their hourly rate.Since all speaking engagements are in the local area, speakers are paid 10% of their hourly rate for transportation costs.Speakers are paid for their speaking time plus their travel and preparation time.The standard time estimated for each speaking engagement is 1 hour and 30 minutes.
Required:
Calculate the standard cost for each engagement.

Accepted Answer

The answer of As a service to the public, the...

Question 13

Barry Co.manufactures leather briefcases and carryalls.Barry's production manager has provided the following production budget.Each briefcase or carryall requires 1.2 yards of leather fabric and Barry maintains an ending inventory of leather fabric equal to 25% of the next month's production needs.   If each yard of leather fabric costs $8.60, how much should Barry budget for purchases of fabric in April?

Accepted Answer

A) $784,320 
B) $629,520 
C) $619,200 
D) $524,600 
A) $784,320 
B) $629,520 
C) $619,200 
D) $524,600

Question 14

A manager estimates that revenues for the coming period will be $85,000 but includes only $80,000 in her budget.This is an example of

Accepted Answer

A) pro-forma variance. 
B) revenue slack. 
C) budgetary padding. 
D) unfavorable planning. 
A) pro-forma variance. 
B) revenue slack. 
C) budgetary padding. 
D) unfavorable planning.

Question 15

Senegalese Specialties, a retailer of West African food products, has completed the following sales forecast for the coming year:   Senegalese Specialties maintains an ending inventory level of 60 percent of the following month's cost of goods sold.The company's cost of goods sold is 35 percent of sales.
Required: 
a.Prepare Senegalese Specialties purchases budget for June and July.Omit the heading.Use the following format:
   
b.Assuming that Senegalese Specialties pays for 50 percent of its purchases in the month of purchase and the remaining 50 percent in the month following the purchase, prepare the company's cash payments budget for July.Omit the heading.

Accepted Answer

The answer of Senegalese Specialties, a retailer of West African...

Question 16

To determine the cash payments for direct materials during a period, companies prepare a

Accepted Answer

A) cash payment for materials budget. 
B) cash flow from operating activities. 
C) cash disbursements schedule. 
D) None of these answer choices are correct. 
A) cash payment for materials budget. 
B) cash flow from operating activities. 
C) cash disbursements schedule. 
D) None of these answer choices are correct.

Question 17

Which of the following budget approaches begins each year at $0 and each individual budget item must be justified?

Accepted Answer

A) Dollar value-based budgeting 
B) Governmental-based budgeting 
C) Justification-based budgeting 
D) Zero-based budgeting 
A) Dollar value-based budgeting 
B) Governmental-based budgeting 
C) Justification-based budgeting 
D) Zero-based budgeting

Question 18

Undesirable behavior is especially common in a bottom-up budget environment because managers

Accepted Answer

A) may be required to explain unfavorable outcomes for amounts for factors they are able to control that caused the outcomes. 
B) have the ability to include budgetary slack to increase his or her chances of receiving a favorable performance evaluation. 
C) tend to employ tactical planning. 
D) do not control excess spending, and often exceed budgeted expenses. 
A) may be required to explain unfavorable outcomes for amounts for factors they are able to control that caused the outcomes. 
B) have the ability to include budgetary slack to increase his or her chances of receiving a favorable performance evaluation. 
C) tend to employ tactical planning. 
D) do not control excess spending, and often exceed budgeted expenses.

Question 19

Deviations from the budget may occur because of

Accepted Answer

A) bad decisions. 
B) events beyond the company's control. 
C) good decisions. 
D) All of these answer choices are correct. 
A) bad decisions. 
B) events beyond the company's control. 
C) good decisions. 
D) All of these answer choices are correct.

Question 20

Which of the following is an advantage of ideal standards?

Accepted Answer

A) Employees will be motivated. 
B) Employees will take pride in their work. 
C) Employee morale will be high. 
D) Workers operate at 100% efficiency. 
A) Employees will be motivated. 
B) Employees will take pride in their work. 
C) Employee morale will be high. 
D) Workers operate at 100% efficiency.

The difference in standard price and standard cost of direct material is that

Information from the manufacturing overhead budget flows to the

Which of the following is not a characteristic of a bottom-up budget environment?

Practical standards represent a level of performance that can be attained with reasonable effort.

Which of the following is not a characteristic of a top-down budget environment?

Performance-standard setting is not an exact science, but there are some hard and fast criterion for proving one standard right and the other one wrong.

The terms standard price and standard cost can be used interchangeably.

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

A manager estimates that revenues for the coming period will be $85,000 but includes only $80,000 in her budget.This is an example of

To determine the cash payments for direct materials during a period, companies prepare a

Which of the following budget approaches begins each year at $0 and each individual budget item must be justified?

Undesirable behavior is especially common in a bottom-up budget environment because managers

Deviations from the budget may occur because of

Which of the following is an advantage of ideal standards?

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 difference in standard price and standard cost of direct material is that

Information from the manufacturing overhead budget flows to the

Which of the following is not a characteristic of a bottom-up budget environment?

Practical standards represent a level of performance that can be attained with reasonable effort.

Which of the following is not a characteristic of a top-down budget environment?

Performance-standard setting is not an exact science, but there are some hard and fast criterion for proving one standard right and the other one wrong.

The terms standard price and standard cost can be used interchangeably.

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

A manager estimates that revenues for the coming period will be $85,000 but includes only $80,000 in her budget.This is an example of

To determine the cash payments for direct materials during a period, companies prepare a

Which of the following budget approaches begins each year at $0 and each individual budget item must be justified?

Undesirable behavior is especially common in a bottom-up budget environment because managers

Deviations from the budget may occur because of

Which of the following is an advantage of ideal standards?

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

Filters