Question 1

Zero-based budgeting is not as time consuming as incremental budgeting.

Accepted Answer

A) True 
 B)False

Question 2

Kandy Harts manufactures custom T-shirts.Each T-shirt can be imprinted front and back with photos, company logos or other information.Each T-shirt requires 2 ounces of ink, 15 minutes of direct labor (processing, folding, packaging), and a plastic bag for packaging.The following information is available regarding costs:   Kandy applied overhead at a rate of $9.40 per direct labor hour, and fringe benefits for workers are an additional 20% of wages.What is the standard price and standard quantity for manufacturing overhead?

Accepted Answer

A) $11.28; 0.25 hour 
B) $9.40; 0.25 hour 
C) $2.35; 1 hour 
D) $2.82; 0.25 hour 
A) $11.28; 0.25 hour 
B) $9.40; 0.25 hour 
C) $2.35; 1 hour 
D) $2.82; 0.25 hour

Question 3

Williams Company makes and sells laundry duffel bags.Each duffel bag sells for $20 and has a unit variable cost of $12.The company has provided the following budgeting data for March:   If necessary, Williams will borrow cash from the local bank in multiples of $1,000.
Required: 
a.How many units did Williams budget to sell during March?
b.What is Williams' budgeted cash balance at the end of the period before borrowing?
c.How much should Williams budget for borrowing in January?

Accepted Answer

a. @#IMG-DLM& Williams must bo

Question 4

Brand, Inc.makes portable generators.Budgeted sales are 20,000 for July, 25,000 for August, 28,000 for September, and 31,000 for October.Brand maintains an ending inventory equal to 10% of the following month's sales.Ending inventory at June 30th was 2,000.
Required
Prepare a production budget for the 3rd quarter ending September 30.

Accepted Answer

The answer of Brand, Inc.makes portable generators.Budgeted sales are 20,000...

Question 5

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.   How many yards of leather fabric will Barry budget to purchase in May?

Accepted Answer

A) 94,200 
B) 75,000 
C) 62,500 
D) 76,800 
A) 94,200 
B) 75,000 
C) 62,500 
D) 76,800

Question 6

The direct labor quantity standard is the number of products that can be produced in one hour.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is not a suggested source for forecasting sales?

Accepted Answer

A) Customer-provided requirements 
B) Historical sales data 
C) Random statistical data 
D) Industry projections 
A) Customer-provided requirements 
B) Historical sales data 
C) Random statistical data 
D) Industry projections

Question 8

Which of the following is not a consequence of a sales budget developed by an overly optimistic marketing department?

Accepted Answer

A) Too much inventory may be produced. 
B) Too much material will be ordered. 
C) The company will fail to achieve its budgeted income. 
D) More cash will be on hand than anticipated. 
A) Too much inventory may be produced. 
B) Too much material will be ordered. 
C) The company will fail to achieve its budgeted income. 
D) More cash will be on hand than anticipated.

Question 9

Which of the following is not a characteristic of zero-based budgeting?

Accepted Answer

A) This method of budgeting is often used in governmental entities. 
B) This method of budgeting is much more time-consuming than incremental budgeting. 
C) This method of budgeting encourages budgetary slack. 
D) All of these answer choices are characteristics of zero-based budgeting. 
A) This method of budgeting is often used in governmental entities. 
B) This method of budgeting is much more time-consuming than incremental budgeting. 
C) This method of budgeting encourages budgetary slack. 
D) All of these answer choices are characteristics of zero-based budgeting.

Question 10

Mountaineers, Inc.makes and sells high-quality backpacking tents.Sally Gimbrel, the controller, is responsible for preparing Mountaineers' master budget.She has received the following sales forecast for 2020 from the sales manager.   Required:
Prepare Mountaineers' sales budget for the first quarter.Omit the heading.

Accepted Answer

The answer of Mountaineers, Inc.makes and sells high-quality backpacking tents.Sally...

Question 11

Percy's Pickled Snacks produces several types of pickled vegetables.The company budgets for each quarter in the last month of the previous quarter.In early March, Percy is preparing the budget for pickled beets.Budgeted sales are 12,000 jars for April, 16,000 jars for May, and 19,000 jars for June.Each jar requires 1.2 pounds of beets.The pickling process takes 60 minutes for 20 jars.Because pressurized cooking is used, the processing is monitored by an employee at all times.Each jar of pickled beets sells for $15.00.Percy requires ending Finished Goods inventory equal to 25% of the following month's sales.Other information is as follows:   What is Percy's overhead budget for April?

Accepted Answer

A) $27,000 
B) $29,250 
C) $36,000 
D) $20,250 
A) $27,000 
B) $29,250 
C) $36,000 
D) $20,250

Question 12

The time needed to produce one unit of product is referred to as

Accepted Answer

A) the direct labor efficiency standard. 
B) the direct labor time standard. 
C) the direct labor quantity standard. 
D) the direct labor standard. 
A) the direct labor efficiency standard. 
B) the direct labor time standard. 
C) the direct labor quantity standard. 
D) the direct labor standard.

Question 13

Alexa Industries has the following amounts budgeted for selling and administrative expenses for February:   What amount will Alexa report on its February pro-forma income statement for selling and administrative expenses?

Accepted Answer

A) $154,400 
B) $169,200 
C) $148,000 
D) $156,000 
A) $154,400 
B) $169,200 
C) $148,000 
D) $156,000

Question 14

Under both participative budgeting and imposed budgeting, the process is

Accepted Answer

A) linear. 
B) iterative. 
C) curvilinear. 
D) None of these answer choices are correct. 
A) linear. 
B) iterative. 
C) curvilinear. 
D) None of these answer choices are correct.

Question 15

Percy's Pickled Snacks produces several types of pickled vegetables.The company budgets for each quarter in the last month of the previous quarter.In early March, Percy is preparing the budget for pickled beets.Budgeted sales are 12,000 jars for April, 16,000 jars for May, and 19,000 jars for June.Each jar requires 1.2 pounds of beets.The pickling process takes 60 minutes for 20 jars.Because pressurized cooking is used, the processing is monitored by an employee at all times.Each jar of pickled beets sells for $15.00.Percy requires ending Finished Goods inventory equal to 25% of the following month's sales.Other information is as follows:   What is Percy's production budget for April?

Accepted Answer

A) 12,000 
B) 13,000 
C) 16,000 
D) 11,000 
A) 12,000 
B) 13,000 
C) 16,000 
D) 11,000

Question 16

Which of the following is not a behavioral issue related to a top-down budgeting environment?

Accepted Answer

A) Employees may feel that an imposed budget is unfair. 
B) Employees will have no motivation to attempt to meet the budget. 
C) Employees may engage in budgetary padding. 
D) The organization's resources may be wasted. 
A) Employees may feel that an imposed budget is unfair. 
B) Employees will have no motivation to attempt to meet the budget. 
C) Employees may engage in budgetary padding. 
D) The organization's resources may be wasted.

Question 17

Custom Design manufactures t-shirts for new parents and grandparents by turning a client's newborn baby's picture into a design on the shirt.The following information has been provided by various units within Custom Design's departments.The company purchases cotton t-shirts in bundles of 100 at a price of $400 per bundle.Custom Design has to pay shipping charges of $10 per bundle.The process of transferring pictures onto the shirts costs $0.75 per shirt.Each shirt is boxed in a cardboard box that costs $0.15 each.It takes one worker 10 minutes to prepare a shirt and transfer the picture onto the shirt and another worker 5 minutes to check the shirt for flaws in the printing and package the shirt.Workers are paid $15 per hour.Custom Design applies overhead at a rate of 100% of direct labor cost.
Required:
Compute the standard cost of producing one t-shirt.

Accepted Answer

The answer of Custom Design manufactures t-shirts for new parents...

Question 18

Percy's Pickled Snacks produces several types of pickled vegetables.The company budgets for each quarter in the last month of the previous quarter.In early March, Percy is preparing the budget for pickled beets.Budgeted sales are 12,000 jars for April, 16,000 jars for May, and 19,000 jars for June.Each jar requires 1.2 pounds of beets.The pickling process takes 60 minutes for 20 jars.Because pressurized cooking is used, the processing is monitored by an employee at all times.Each jar of pickled beets sells for $15.00.Percy requires ending Finished Goods inventory equal to 25% of the following month's sales.Other information is as follows:   What is Percy's direct labor budget for May?

Accepted Answer

A) $12,450 
B) $10,050 
C) $7,200 
D) $9,600 
A) $12,450 
B) $10,050 
C) $7,200 
D) $9,600

Question 19

Budgets assist managers which of the following aspects of management?

Accepted Answer

A) Planning 
B) Controlling 
C) Evaluating 
D) All of these answer choices are correct. 
A) Planning 
B) Controlling 
C) Evaluating 
D) All of these answer choices are correct.

Question 20

Since the purchasing agent is responsible for ordering raw materials, he or she would be the one to negotiate a volume discount.

Accepted Answer

A) True 
 B)False

Zero-based budgeting is not as time consuming as incremental budgeting.

The direct labor quantity standard is the number of products that can be produced in one hour.

Which of the following is not a suggested source for forecasting sales?

Which of the following is not a consequence of a sales budget developed by an overly optimistic marketing department?

Which of the following is not a characteristic of zero-based budgeting?

The time needed to produce one unit of product is referred to as

Alexa Industries has the following amounts budgeted for selling and administrative expenses for February: What amount will Alexa report on its February pro-forma income statement for selling and administrative expenses?

Under both participative budgeting and imposed budgeting, the process is

Which of the following is not a behavioral issue related to a top-down budgeting environment?

Budgets assist managers which of the following aspects of management?

Since the purchasing agent is responsible for ordering raw materials, he or she would be the one to negotiate a volume discount.

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

Zero-based budgeting is not as time consuming as incremental budgeting.

The direct labor quantity standard is the number of products that can be produced in one hour.

Which of the following is not a suggested source for forecasting sales?

Which of the following is not a consequence of a sales budget developed by an overly optimistic marketing department?

Which of the following is not a characteristic of zero-based budgeting?

The time needed to produce one unit of product is referred to as

Alexa Industries has the following amounts budgeted for selling and administrative expenses for February: What amount will Alexa report on its February pro-forma income statement for selling and administrative expenses?

Under both participative budgeting and imposed budgeting, the process is

Which of the following is not a behavioral issue related to a top-down budgeting environment?

Budgets assist managers which of the following aspects of management?

Since the purchasing agent is responsible for ordering raw materials, he or she would be the one to negotiate a volume discount.

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