Question 1

Which of the following equations is the correct formula to determine the required number of units to be produced in a given period?

Accepted Answer

A)  Projected sales + Desired ending inventory - Beginning inventory 
B)  Projected sales - Desired ending inventory + Beginning inventory 
C)  Projected sales + Desired ending inventory + Beginning inventory 
D)  Beginning inventory + Purchases - Desired ending inventory 
A)  Projected sales + Desired ending inventory - Beginning inventory 
B)  Projected sales - Desired ending inventory + Beginning inventory 
C)  Projected sales + Desired ending inventory + Beginning inventory 
D)  Beginning inventory + Purchases - Desired ending inventory

Question 2

Preparation of a budgeted income statement is a necessary prerequisite to the development of a budgeted balance sheet.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following best describes the order in which budgets should be prepared when developing the annual master operating budget?

Accepted Answer

A)  Production budget, direct material budget, revenue budget. 
B)  Production budget, revenue budget, direct material budget. 
C)  Revenue budget, production budget, direct material budget. 
D)  Revenue budget, direct material budget, production budget. 
A)  Production budget, direct material budget, revenue budget. 
B)  Production budget, revenue budget, direct material budget. 
C)  Revenue budget, production budget, direct material budget. 
D)  Revenue budget, direct material budget, production budget.

Question 4

In any period in which the budgeted ending inventory of finished goods exceeds the budgeted beginning inventory, production of units will need to exceed budgeted sales.

Accepted Answer

A) True 
 B)False

Question 5

Howe Industries has prepared the quarterly production budget that appears below:
  The production budget is consistent with the company's inventory policy requiring ending inventories of finished goods equal to 10% of the following quarter's needs. The company is currently preparing its budget for direct labor. It is known that 1.5 hours of direct labor is required per unit produced and that the direct labor wage rate is $25 per hour. What number of direct labor hours and wages will be required in the second quarter?

Accepted Answer

A)  30,000 hours and $750,000 
B)  33,600 hours and $840,000 
C)  36,000 hours and $900,000 
D)  20,000 hours and $500,000 
A)  30,000 hours and $750,000 
B)  33,600 hours and $840,000 
C)  36,000 hours and $900,000 
D)  20,000 hours and $500,000

Question 6

Cooper Company's management team is preparing a cash budget for the coming quarter. The following budgeted information is under review.
   The company expects to collect 40% of its monthly sales in the month of sale and 60% in the following month. Fifty percent of inventory purchases are paid in the month of purchase, and the other 50% in the following month. All payments for other expenses are made in the month incurred.
Cooper forecasts the following account balances at the beginning of the quarter.
   Required. Given the above information, compute the projected change in cash during the coming quarter.

Accepted Answer

(CMA Retired) Cooper Company's managemen

Question 7

Scott Industries has estimated that production for the next five quarters will be:
   Finished units of production require four pounds of raw material per unit. The raw material cost is $2.50 per pound. There are 45,000 pounds of raw material on hand at the beginning of the first quarter of Year 1. Scott Industries desires to have on hand 20 percent of next quarter's raw material needs at the beginning of each quarter.
Required. Prepare in good form a materials purchases budget for Scott Industries for each quarter of Year 1. Make sure your budget shows both the quantities and dollar costs of the raw materials required.

Accepted Answer

Scott Industries has estimated that prod

Question 8

Top-down management in which employees are given little to no discretion is most indicative of which type of business organization?

Accepted Answer

A)  Small organizations 
B)  Functional organizations 
C)  Divisionally organized entities 
D)  Not-for-profit organizations 
A)  Small organizations 
B)  Functional organizations 
C)  Divisionally organized entities 
D)  Not-for-profit organizations

Question 9

Fit and Tight Plumbing Supply Company makes all sales on a credit basis. The company has forecast sales for the upcoming quarter as follows:
  Experience has shown that 60% of a month's sales are collected in the month the sales take place, 25% are collected in the month that follows the sale, and the final 15% is collected in the second month following sale. Bad debts are negligible and are ignored for budgeting purposes. May and June actual sales were $45,000 and $50,000, respectively. What amount of cash receipts from sales will the company budget for August?

Accepted Answer

A)  $27,000 
B)  $44,500 
C)  $43,250 
D)  $45,000 
A)  $27,000 
B)  $44,500 
C)  $43,250 
D)  $45,000

Question 10

Playtime Toys estimates that it will sell 200,000 dolls during the coming year. The beginning inventory is 12,000 dolls; the target ending inventory is 15,000 dolls. Each doll requires two shoes that are purchased from an outside supplier. The beginning inventory of shoes is 20,000; the target ending inventory is 18,000 shoes. The number of shoes that should be purchased during the year is:

Accepted Answer

A)  396,000 shoes 
B)  398,000 shoes 
C)  402,000 shoes 
D)  404,000 shoes 
A)  396,000 shoes 
B)  398,000 shoes 
C)  402,000 shoes 
D)  404,000 shoes

Question 11

In preparing the direct material purchases budget for next quarter, the plant controller has the following information available:
  How many pounds of materials must be purchased?

Accepted Answer

A)  2,475 
B)  7,900 
C)  8,700 
D)  9,300 
A)  2,475 
B)  7,900 
C)  8,700 
D)  9,300

Question 12

The evolution of an organization into a functional structure with subunits performing different processes would most likely result from:

Accepted Answer

A)  A need to deal with more complex markets. 
B)  A need to deal with a more challenging regulatory environment. 
C)  Increasing legal liabilities. 
D)  A required division of management tasks as the organization expands in size. 
A)  A need to deal with more complex markets. 
B)  A need to deal with a more challenging regulatory environment. 
C)  Increasing legal liabilities. 
D)  A required division of management tasks as the organization expands in size.

Question 13

Cash shortages and surpluses occur due to a lack of synchronization between the rate at which customer receivables are collected and the rate at which disbursements must be made for raw materials, direct labor, overhead, and selling and administrative costs.

Accepted Answer

A) True 
 B)False

Question 14

A company that manufactures furniture is establishing its budget for the upcoming year. All of the following items would appear in its overhead budget except for the:

Accepted Answer

A)  Overtime paid to the workers who perform production scheduling. 
B)  Cost of glue used to secure the attachment of the legs to the tables. 
C)  Fringe benefits paid to the production supervisor. 
D)  Freight charges paid for the delivery of raw materials to the company. 
A)  Overtime paid to the workers who perform production scheduling. 
B)  Cost of glue used to secure the attachment of the legs to the tables. 
C)  Fringe benefits paid to the production supervisor. 
D)  Freight charges paid for the delivery of raw materials to the company.

Which of the following equations is the correct formula to determine the required number of units to be produced in a given period?

Preparation of a budgeted income statement is a necessary prerequisite to the development of a budgeted balance sheet.

Which of the following best describes the order in which budgets should be prepared when developing the annual master operating budget?

In any period in which the budgeted ending inventory of finished goods exceeds the budgeted beginning inventory, production of units will need to exceed budgeted sales.

Top-down management in which employees are given little to no discretion is most indicative of which type of business organization?

In preparing the direct material purchases budget for next quarter, the plant controller has the following information available: How many pounds of materials must be purchased?

The evolution of an organization into a functional structure with subunits performing different processes would most likely result from:

Cash shortages and surpluses occur due to a lack of synchronization between the rate at which customer receivables are collected and the rate at which disbursements must be made for raw materials, direct labor, overhead, and selling and administrative costs.

A company that manufactures furniture is establishing its budget for the upcoming year. All of the following items would appear in its overhead budget except for the:

Business Planning and Analysis: An Integrative Framework for Management Accounting

Measuring and Evaluating Performance

Defining and Using Cost Estimates

Cost Pools, Capacity, and Activity- Based Costing

Understanding the Management Process

Planning in the Product Domain

Assessing and Improving Product Profitability

Setting Process Expectations

Evaluating and Improving Process Performance

Setting Performance Expectations in Large, Complex Organizations

Evaluating and Improving Entity Performance

Setting and Achieving Targets in the Customer Domain

Strategic Cost Management and the Value Chain Domain

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Exam 10: Setting Performance Expectations at the Entity Level

Which of the following equations is the correct formula to determine the required number of units to be produced in a given period?

Preparation of a budgeted income statement is a necessary prerequisite to the development of a budgeted balance sheet.

Which of the following best describes the order in which budgets should be prepared when developing the annual master operating budget?

In any period in which the budgeted ending inventory of finished goods exceeds the budgeted beginning inventory, production of units will need to exceed budgeted sales.

Top-down management in which employees are given little to no discretion is most indicative of which type of business organization?

In preparing the direct material purchases budget for next quarter, the plant controller has the following information available: How many pounds of materials must be purchased?

The evolution of an organization into a functional structure with subunits performing different processes would most likely result from:

Cash shortages and surpluses occur due to a lack of synchronization between the rate at which customer receivables are collected and the rate at which disbursements must be made for raw materials, direct labor, overhead, and selling and administrative costs.

A company that manufactures furniture is establishing its budget for the upcoming year. All of the following items would appear in its overhead budget except for the:

Business Planning and Analysis: An Integrative Framework for Management Accounting

Measuring and Evaluating Performance

Defining and Using Cost Estimates

Cost Pools, Capacity, and Activity- Based Costing

Understanding the Management Process

Planning in the Product Domain

Assessing and Improving Product Profitability

Setting Process Expectations

Evaluating and Improving Process Performance

Setting Performance Expectations in Large, Complex Organizations

Evaluating and Improving Entity Performance

Setting and Achieving Targets in the Customer Domain

Strategic Cost Management and the Value Chain Domain

Filters