Question 1

A manager of a revenue center is responsible ________.

Accepted Answer

A)  for only the profits of his center 
B)  for investments, revenues, and costs 
C)  for only the sales and fees generated by his center 
D)  for the revenues,costs, and profits of his center 
A)  for only the profits of his center 
B)  for investments, revenues, and costs 
C)  for only the sales and fees generated by his center 
D)  for the revenues,costs, and profits of his center C

Question 2

The sales forecast should be primarily based on ________.

Accepted Answer

A)  statistical analysis 
B)  input from sales managers and sales representatives 
C)  production capacity 
D)  input from the board of directors 
A)  statistical analysis 
B)  input from sales managers and sales representatives 
C)  production capacity 
D)  input from the board of directors B

Question 3

The revenues budget reveals

Accepted Answer

A)  expected cash flows for each product 
B)  actual unit sales from last year multiplied by the budget period's expected selling prices for each product 
C)  the expected level of unit sales multiplied by expected unit selling prices for company products 
D)  the variance of sales from actual for each product 
A)  expected cash flows for each product 
B)  actual unit sales from last year multiplied by the budget period's expected selling prices for each product 
C)  the expected level of unit sales multiplied by expected unit selling prices for company products 
D)  the variance of sales from actual for each product C

Question 4

A company's actual performance should be compared against budgeted amounts for the same accounting period so that ________.

Accepted Answer

A)  adjustments for future conditions can be included 
B)  to avoid any feedback from the budgets due to past miscues 
C)  inefficiencies of the past year can be included 
D)  a rolling budget can be implemented 
A)  adjustments for future conditions can be included 
B)  to avoid any feedback from the budgets due to past miscues 
C)  inefficiencies of the past year can be included 
D)  a rolling budget can be implemented

Question 5

To prepare the direct materials labor costs budget, which of the following budget must be prepared first?

Accepted Answer

A)  direct material purchase budget 
B)  production budget 
C)  direct material usage budget 
D)  budgeted manufacturing overhead 
A)  direct material purchase budget 
B)  production budget 
C)  direct material usage budget 
D)  budgeted manufacturing overhead

Question 6

Wallace Company provides the following data for next year:
 
The gross profit rate is 35% of sales. Inventory at the end of December is $29,600 and target ending inventory levels are 10% of next month's sales, stated at cost.
What is the amount of purchases budgeted for January?

Accepted Answer

A)  $70,980 
B)  $55,420 
C)  $78,000 
D)  $85,020 
A)  $70,980 
B)  $55,420 
C)  $78,000 
D)  $85,020

Question 7

Mary's Baskets Company expects to manufacture and sell 30,000 baskets in 2019 for $5 each. There are 4,000 baskets in beginning finished goods inventory with target ending inventory of 9,000 baskets. The company keeps no work-in-process inventory. What amount of sales revenue will be reported on the 2019 budgeted income statement?

Accepted Answer

A)  $175,000 
B)  $150,000 
C)  $125,000 
D)  $85,000 
A)  $175,000 
B)  $150,000 
C)  $125,000 
D)  $85,000

Question 8

Christy Enterprises reports the year-end information from 2018 as follows:
   
Christy is developing the 2019 budget. In 2019 the company would like to increase selling prices by 10%, and as a result expects a decrease in sales volume of 5%. Cost of goods sold as a percentage of sales is expected to increase to 62%. Other than depreciation, all operating costs are variable.
Required:
Prepare a budgeted income statement for 2019.

Accepted Answer

The answer of Christy Enterprises reports the year-end information from...

Question 9

Annette has been recently promoted to head of her department. She is responsible for activities that influence revenues and is responsible for controlling the expenses of her department. She is held responsible for maximizing the profits of the department and to ensure that the earnings are ploughed back into the business. Annette is most likely to head a (n) ________.

Accepted Answer

A)  revenue center 
B)  investment center 
C)  cost center 
D)  profit center 
A)  revenue center 
B)  investment center 
C)  cost center 
D)  profit center

Question 10

The Japanese use kaizen to mean financing alternatives.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is required to arrive at the budgeted units to be produced in a year?

Accepted Answer

A)  estimated direct materials inventory required at the end of the year 
B)  estimated finished goods inventory required at the end of the year 
C)  amount of direct materials to be used during the year 
D)  amount of manufacturing overhead to be incurred 
A)  estimated direct materials inventory required at the end of the year 
B)  estimated finished goods inventory required at the end of the year 
C)  amount of direct materials to be used during the year 
D)  amount of manufacturing overhead to be incurred

Question 12

Management will most likely behave the same way if a department is structured as a cost center or if the same department is structured as a profit center.

Accepted Answer

A) True 
 B)False

Question 13

Financing decisions primarily deal with ________.

Accepted Answer

A)  the use of scarce resources 
B)  how to obtain funds to acquire resources 
C)  acquiring equipment and buildings 
D)  preparing financial statements for stockholders 
A)  the use of scarce resources 
B)  how to obtain funds to acquire resources 
C)  acquiring equipment and buildings 
D)  preparing financial statements for stockholders

Question 14

First Class, Inc., expects to sell 22,000 pool cues for $12 each. Direct materials costs are $3, direct manufacturing labor is $4, and manufacturing overhead is $0.84 per pool cue. The following inventory levels apply to 2019:
 
On the 2019 budgeted income statement, what amount will be reported for sales?

Accepted Answer

A)  $277,200 
B)  $264,000 
C)  $396,000 
D)  $409,200 
A)  $277,200 
B)  $264,000 
C)  $396,000 
D)  $409,200

Question 15

Creating a little anxiety among managers and staff with challenging budgets helps employee work harder to achieve goals.

Accepted Answer

A) True 
 B)False

Question 16

ERP systems store vast quantities of information about the materials, machines and equipment, labor, power, maintenance, and setups needed to manufacture different products. This helps simplify the budgeting process as ERP systems ________.

Accepted Answer

A)  can quickly calculate the manufacturing and nonmanufacturing costs based on a given sales quantity 
B)  automatically identify and record changes in processes involved in producing products 
C)  identify which underlying assumptions are likely to change 
D)  always use a rolling budget ensuring that a budget is always available for a specified future period 
A)  can quickly calculate the manufacturing and nonmanufacturing costs based on a given sales quantity 
B)  automatically identify and record changes in processes involved in producing products 
C)  identify which underlying assumptions are likely to change 
D)  always use a rolling budget ensuring that a budget is always available for a specified future period

Question 17

Cost of goods sold budget is calculated as follows: beginning finished-goods inventory +cost of goods manufactured - ending finished-goods inventory

Accepted Answer

A) True 
 B)False

Question 18

Explain what is meant by sensitivity analysis in budgeting, and discuss how managers might use sensitivity analysis in practice.

Accepted Answer

Sensitivity analysis is a "what-if" tech

Question 19

Prescher Company sells three products with the following seasonal sales pattern:
   
The annual sales budget shows forecasts for the different products and their expected selling price per unit to be as follows:
   
Required:
Prepare a sales budget, in units and dollars, by quarters for the company for the coming year.

Accepted Answer

The answer of Prescher Company sells three products with the...

Question 20

The following information pertains to Monroe Company:
 
-Cash is collected from customers in the following manner:
Month of sale30%
Month following the sale70%
-40% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month.
-Labor costs are 20% of sales. Other operating costs are $37,000 per month (including $8,000 of depreciation). Both of these are paid in the month incurred.
-The cash balance on March 1 is $10,000. A minimum cash balance of $6,000 is required at the end of the month. Money can be borrowed in multiples of $1,000.
How much cash will be collected from customers in March?

Accepted Answer

A)  $96,400 
B)  $91,600 
C)  $100,000 
D)  $118,000 
A)  $96,400 
B)  $91,600 
C)  $100,000 
D)  $118,000

A manager of a revenue center is responsible ________.

The sales forecast should be primarily based on ________.

The revenues budget reveals

A company's actual performance should be compared against budgeted amounts for the same accounting period so that ________.

To prepare the direct materials labor costs budget, which of the following budget must be prepared first?

Wallace Company provides the following data for next year: The gross profit rate is 35% of sales. Inventory at the end of December is $29,600 and target ending inventory levels are 10% of next month's sales, stated at cost. What is the amount of purchases budgeted for January?

The Japanese use kaizen to mean financing alternatives.

Which of the following is required to arrive at the budgeted units to be produced in a year?

Management will most likely behave the same way if a department is structured as a cost center or if the same department is structured as a profit center.

Financing decisions primarily deal with ________.

Creating a little anxiety among managers and staff with challenging budgets helps employee work harder to achieve goals.

ERP systems store vast quantities of information about the materials, machines and equipment, labor, power, maintenance, and setups needed to manufacture different products. This helps simplify the budgeting process as ERP systems ________.

Cost of goods sold budget is calculated as follows: beginning finished-goods inventory +cost of goods manufactured - ending finished-goods inventory

Explain what is meant by sensitivity analysis in budgeting, and discuss how managers might use sensitivity analysis in practice.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Flexible Budgets, Direct-Cost Variances, and Management Control

Flexible Budgets, Overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Pricing Decisions and Cost Management

Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, Common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, Rework, and Scrap

Balanced Scorecard: Quality and Time

Inventory Management, Just-in-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing, and Multinational Considerations

Performance Measurement, Compensation, and Multinational Considerations

Filters

Exam 6: Master Budget and Responsibility Accounting

A manager of a revenue center is responsible ________.

The sales forecast should be primarily based on ________.

The revenues budget reveals

A company's actual performance should be compared against budgeted amounts for the same accounting period so that ________.

To prepare the direct materials labor costs budget, which of the following budget must be prepared first?

Wallace Company provides the following data for next year: The gross profit rate is 35% of sales. Inventory at the end of December is $29,600 and target ending inventory levels are 10% of next month's sales, stated at cost. What is the amount of purchases budgeted for January?

The Japanese use kaizen to mean financing alternatives.

Which of the following is required to arrive at the budgeted units to be produced in a year?

Management will most likely behave the same way if a department is structured as a cost center or if the same department is structured as a profit center.

Financing decisions primarily deal with ________.

Creating a little anxiety among managers and staff with challenging budgets helps employee work harder to achieve goals.

ERP systems store vast quantities of information about the materials, machines and equipment, labor, power, maintenance, and setups needed to manufacture different products. This helps simplify the budgeting process as ERP systems ________.

Cost of goods sold budget is calculated as follows: beginning finished-goods inventory +cost of goods manufactured - ending finished-goods inventory

Explain what is meant by sensitivity analysis in budgeting, and discuss how managers might use sensitivity analysis in practice.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Flexible Budgets, Direct-Cost Variances, and Management Control

Flexible Budgets, Overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Pricing Decisions and Cost Management

Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, Common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, Rework, and Scrap

Balanced Scorecard: Quality and Time

Inventory Management, Just-in-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing, and Multinational Considerations

Performance Measurement, Compensation, and Multinational Considerations

Filters