Question 1

The standard labor time allowed is computed by multiplying the desired production by the standard labor hours needed to produce one unit.

Accepted Answer

A) True 
 B)False  False

Question 2

Use the following information to answer questions 
Skyline Corporation began operations on January 1, 2010. Skyline's budgeted January 2010, February 2010, and March 2010 sales are $1,000,000, $1,200,000, and $2,000,000 respectively. The company estimates that 75% of its sales will be made on credit. The company also estimates that 50% of Skyline's customers will pay their outstanding balances in the month of the sale, 30% in the first month subsequent to the sale, and 20% in the second month subsequent to the sale
-How much cash should Skyline expect to receive from its customers in March 2010?

Accepted Answer

A)  $1,170,000 
B)  $1,500,000 
C)  $1,670,000 
D)  $1,707,500 
E)  $1,920,000 
A)  $1,170,000 
B)  $1,500,000 
C)  $1,670,000 
D)  $1,707,500 
E)  $1,920,000 C

Question 3

East Corp. manufactures a product that uses 3 pounds of raw material. East's raw material inventory at December 31, 2009 is 50,000 pounds; its desired raw material inventory at December 31, 2010 is 25% of beginning inventory. East's estimated 2010 production is 700,000 units of finished product. How many pounds of raw material should East buy during 2010?

Accepted Answer

A)  662,500 
B)  737,500 
C)  2,062,500 
D)  2,212,500 
E)  2,237,500 
A)  662,500 
B)  737,500 
C)  2,062,500 
D)  2,212,500 
E)  2,237,500 C

Question 4

West Corp.'s December 31, 2009 inventory contains 10,000 units. Forecasted sales for 2010 are 200,000 units and desired 2010 year-end inventory is 15% of beginning inventory. During 2010, West should produce

Accepted Answer

A)  191,500 units. 
B)  200,000 units. 
C)  201,500 units. 
D)  208,500 units. 
E)  211,500 units. 
A)  191,500 units. 
B)  200,000 units. 
C)  201,500 units. 
D)  208,500 units. 
E)  211,500 units.

Question 5

An organization's budget should align with its goals and objectives.

Accepted Answer

A) True 
 B)False

Question 6

Budgeting processes

Accepted Answer

A)  are the same for all organizations. 
B)  is important to efficient resource allocation. 
C)  should reflect current economic conditions. 
D)  indicate the appropriateness of break-even analysis. 
E)  start with the preparation of a cash budget. 
A)  are the same for all organizations. 
B)  is important to efficient resource allocation. 
C)  should reflect current economic conditions. 
D)  indicate the appropriateness of break-even analysis. 
E)  start with the preparation of a cash budget.

Question 7

The interpretation of future plans into monetary amounts so that progress toward organizational goals can be determined is called

Accepted Answer

A)  budgeting. 
B)  variance analysis. 
C)  cost-volume-profit analysis. 
D)  monthly closing process. 
E)  financial statement preparation. 
A)  budgeting. 
B)  variance analysis. 
C)  cost-volume-profit analysis. 
D)  monthly closing process. 
E)  financial statement preparation.

Question 8

Union Air's January 2010, February 2010, and March 2010 purchases were $2,000,000, $1,500,000, and $4,000,000 respectively. Union Air pays 75% of its invoices in the month that those purchases take place, 20% in the first month subsequent to the purchase, and 5% in the second month subsequent to the purchase. How much cash will Union Air disburse in March 2010?

Accepted Answer

A)  $2,000,000 
B)  $3,300,000 
C)  $3,400,000 
D)  $4,000,000 
E)  $4,400,000 
A)  $2,000,000 
B)  $3,300,000 
C)  $3,400,000 
D)  $4,000,000 
E)  $4,400,000

Question 9

Which of the following will affect the cash budget?

Accepted Answer

The answer of Which of the following will affect the...

Question 10

Run N' Wild Corporation is estimating how many pairs of running shorts it should produce. The company wants its ending inventory each month to be 40%	 of its beginning inventory.
‪   
Required:
Fill in the missing blanks to complete Run N' Wild's sales and production budgets.

Accepted Answer

The answer of Run N' Wild Corporation is estimating how...

Question 11

A standard is a norm or an average.

Accepted Answer

A) True 
 B)False

Question 12

Standards allow management to exercise control over operations.

Accepted Answer

A) True 
 B)False

Question 13

The standard overhead cost is equal to the

Accepted Answer

A)  predetermined overhead rate per unit. 
B)  underapplied overhead at the end of an accounting period. 
C)  flexible budget overhead amount at the company's budgeted level of activity for the period. 
D)  actual units produced times the predetermined overhead rate. 
E)  standard hours allowed for the production achieved times the actual overhead rate per hour. 
A)  predetermined overhead rate per unit. 
B)  underapplied overhead at the end of an accounting period. 
C)  flexible budget overhead amount at the company's budgeted level of activity for the period. 
D)  actual units produced times the predetermined overhead rate. 
E)  standard hours allowed for the production achieved times the actual overhead rate per hour.

Question 14

The budgeting process

Accepted Answer

A)  should be limited to top management because subordinates do not understand the complexities of such a process. 
B)  ensures that actual goals meet expected goals. 
C)  does not need to be repeated regularly since the business environment is unchanging. 
D)  is most effective when the inputs of both top management and subordinates are considered 
E)  all of the above. 
A)  should be limited to top management because subordinates do not understand the complexities of such a process. 
B)  ensures that actual goals meet expected goals. 
C)  does not need to be repeated regularly since the business environment is unchanging. 
D)  is most effective when the inputs of both top management and subordinates are considered 
E)  all of the above.

Question 15

A significant and favorable labor rate variance is often linked with a significant and favorable labor efficiency variance.

Accepted Answer

A) True 
 B)False

Question 16

A rolling budget allows companies to adjust expectations in response to changes in the business environment.

Accepted Answer

A) True 
 B)False

Question 17

Favorable variances are good for the organization, while unfavorable variances are bad for the organization.

Accepted Answer

A) True 
 B)False

Question 18

Nelson Corporation's began operations on January 1, 2010. Forecasted sales for the first half of 2010 are listed below.
   
Seventy-five percent of Nelson's sales are on credit; the rest are for cash. The credit sales are paid 60% in the month of the sale 25% in the first month after sale, and 15% in the second month after the sale. 
Required:
Determine Nelson's estimated cash receipts for January through March 2010.

Accepted Answer

The answer of Nelson Corporation's began operations on January 1,...

Question 19

The total standard material allowed is equal to the actual level of production times the standard quantity of material needed for each unit.

Accepted Answer

A) True 
 B)False

Question 20

Use the following information to answer questions 
Innovative Inc. budgets 250,000 pair of flip flops sales in January. Desired ending inventory for each month is 5% of the following month's budgeted sales. Assume budgeted unit sales increases by 15% every month and that all units placed into production are completed during the month.
-How many pair of flip flops are budgeted to be sold during the quarter?

Accepted Answer

A)  824,719 pair 
B)  855,625 pair 
C)  868,125 pair 
D)  884,656 pair 
E)  cannot be determined from the above information 
A)  824,719 pair 
B)  855,625 pair 
C)  868,125 pair 
D)  884,656 pair 
E)  cannot be determined from the above information

The standard labor time allowed is computed by multiplying the desired production by the standard labor hours needed to produce one unit.

West Corp.'s December 31, 2009 inventory contains 10,000 units. Forecasted sales for 2010 are 200,000 units and desired 2010 year-end inventory is 15% of beginning inventory. During 2010, West should produce

An organization's budget should align with its goals and objectives.

Budgeting processes

The interpretation of future plans into monetary amounts so that progress toward organizational goals can be determined is called

Which of the following will affect the cash budget?

Run N' Wild Corporation is estimating how many pairs of running shorts it should produce. The company wants its ending inventory each month to be 40% of its beginning inventory. ‪ Required: Fill in the missing blanks to complete Run N' Wild's sales and production budgets.

A standard is a norm or an average.

Standards allow management to exercise control over operations.

The standard overhead cost is equal to the

The budgeting process

A significant and favorable labor rate variance is often linked with a significant and favorable labor efficiency variance.

A rolling budget allows companies to adjust expectations in response to changes in the business environment.

Favorable variances are good for the organization, while unfavorable variances are bad for the organization.

The total standard material allowed is equal to the actual level of production times the standard quantity of material needed for each unit.

An Introduction to the Role of Accounting in the Business World

Concepts and Elements Underlying Accounting

The Mechanics of Double-Entry Bookkeeping

Cash, Short-Term Investments and Accounts Receivable

Inventory

Long-Term Assets: Property, Plant Equipment and Intangibles

Liabilities

Stockholders Equity

The Corporate Income Statement and Financial Analysis

Statement of Cash Flows

Managerial Accounting

Cost-Volume-Profit Analysis

Activity-Based Management and Performance Measurementreward

Filters

Exam 13: The Master Budget

The standard labor time allowed is computed by multiplying the desired production by the standard labor hours needed to produce one unit.

West Corp.'s December 31, 2009 inventory contains 10,000 units. Forecasted sales for 2010 are 200,000 units and desired 2010 year-end inventory is 15% of beginning inventory. During 2010, West should produce

An organization's budget should align with its goals and objectives.

Budgeting processes

The interpretation of future plans into monetary amounts so that progress toward organizational goals can be determined is called

Which of the following will affect the cash budget?

Run N' Wild Corporation is estimating how many pairs of running shorts it should produce. The company wants its ending inventory each month to be 40% of its beginning inventory. ‪ Required: Fill in the missing blanks to complete Run N' Wild's sales and production budgets.

A standard is a norm or an average.

Standards allow management to exercise control over operations.

The standard overhead cost is equal to the

The budgeting process

A significant and favorable labor rate variance is often linked with a significant and favorable labor efficiency variance.

A rolling budget allows companies to adjust expectations in response to changes in the business environment.

Favorable variances are good for the organization, while unfavorable variances are bad for the organization.

The total standard material allowed is equal to the actual level of production times the standard quantity of material needed for each unit.

An Introduction to the Role of Accounting in the Business World

Concepts and Elements Underlying Accounting

The Mechanics of Double-Entry Bookkeeping

Cash, Short-Term Investments and Accounts Receivable

Inventory

Long-Term Assets: Property, Plant Equipment and Intangibles

Liabilities

Stockholders Equity

The Corporate Income Statement and Financial Analysis

Statement of Cash Flows

Managerial Accounting

Cost-Volume-Profit Analysis

Activity-Based Management and Performance Measurementreward

Filters