Question 1

Activity-based budgeting does NOT require:

Accepted Answer

A) specialised expertise in financial management and control. 
B) the ability to see how the organisation's different activities fit together. 
C) knowledge about how activities affect costs. 
D) knowledge of the organisation's activities. 
A) specialised expertise in financial management and control. 
B) the ability to see how the organisation's different activities fit together. 
C) knowledge about how activities affect costs. 
D) knowledge of the organisation's activities.

Question 2

Budgeting for a multinational company is made more complex due to the possibility of exchange rate fluctuations.

Accepted Answer

A) True 
 B)False

Question 3

The regional sales office manager of a national firm is MOST likely responsible for a(n):

Accepted Answer

A) investment centre. 
B) profit centre. 
C) revenue centre. 
D) cost centre. 
A) investment centre. 
B) profit centre. 
C) revenue centre. 
D) cost centre.

Question 4

The cash flow statement does NOT include:

Accepted Answer

A) cash outflows paid toward raw material purchases. 
B) cash inflows from the collection of receivables. 
C) all sales revenues. 
D) interest paid and received. 
A) cash outflows paid toward raw material purchases. 
B) cash inflows from the collection of receivables. 
C) all sales revenues. 
D) interest paid and received.

Question 5

Answer the following questions using the information below:
The following information pertains to Reef Producers Company:
 $\begin{array} { l l c } \text { Month } & \text { Sales } & \text { Purchases } \ \text { January } & \$ 48000 & \$ 16000 \ \text { February } & \$ 64000 & \$ 23000 \ \text { March } & \$ 80000 & \$ 38000 \end{array}$

- Cash is collected from customers in the following manner:

$\begin{array}{ll}
\text { Month of sale } & 30 \% \
\text { Month following the sale } & 70 \%
\end{array}$

$40 \%$ of purchases are paid for in cash in the month of purchase, and the balance is paid the following month.
- Labour costs are $20 \%$ of sales. Other operating costs are $\$ 15000$ per month (including $\$ 4000$ of depreciation). Both of these are paid in the month incurred. The cash balance on 1 March is $\$ 4000$. A minimum cash balance of $\$ 3000$ is required at the end of the month. Money can be borrowed in multiples of $\$ 1000$.
-How much cash will be paid to suppliers in March?

Accepted Answer

A) $29 000 
B) $38 000 
C) $44 000 
D) None of these answers are correct. 
A) $29 000 
B) $38 000 
C) $44 000 
D) None of these answers are correct.

Question 6

Variances between actual and budgeted amounts can be used to:

Accepted Answer

A) signal that company strategies are ineffective. 
B) inform managers about how well the company has implemented its strategies. 
C) alert managers to potential problems and available opportunities. 
D) All of these answers are correct. 
A) signal that company strategies are ineffective. 
B) inform managers about how well the company has implemented its strategies. 
C) alert managers to potential problems and available opportunities. 
D) All of these answers are correct.

Question 7

Answer the following questions using the information below:
Pilbara Co Pty Ltd expects to sell 6000 ceramic vases for $20 each.Direct materials costs are $2,direct manufacturing labour is $10,and manufacturing overhead is $3 per vase.The following inventory levels apply to 2017:
 $$\begin{array} { l r r } 
& \text { Beginning inventory } & \text { Ending inventory } \
\text { Direct materials } & 1000 \text { units } & 1000 \text { units } \
\text { Work-in-process inventory } & 0 \text { units } & 0 \text { units } \
\text { Finished goods inventory } & 400 \text { units } & 500 \text { units }
\end{array}$$
-On the 2018 budgeted income statement,what amount will be reported for sales?

Accepted Answer

A) $122 000 
B) $140 000 
C) $118 000 
D) $120 000 
A) $122 000 
B) $140 000 
C) $118 000 
D) $120 000

Question 8

Activity-based budgeting includes all the following steps EXCEPT:

Accepted Answer

A) computing the cost of performing activities. 
B) determining a separate cost-driver rate for each department. 
C) describing the budget as costs of activities rather than costs of functions. 
D) determining demands for activities from sales and production targets. 
A) computing the cost of performing activities. 
B) determining a separate cost-driver rate for each department. 
C) describing the budget as costs of activities rather than costs of functions. 
D) determining demands for activities from sales and production targets.

Question 9

Describe some of the drawbacks of using the operating budget as a control device.

Accepted Answer

When the operating budget is used as a c

Question 10

Performance reports for responsibility centres are sometimes designed to change managers' behaviour in the direction top management desires even if the reports decrease controllability.

Accepted Answer

A) True 
 B)False

Question 11

Examples of non-financial budgets include all of the following EXCEPT:

Accepted Answer

A) units sold 
B) cash collections from customers 
C) units manufactured 
D) number of new products introduced 
A) units sold 
B) cash collections from customers 
C) units manufactured 
D) number of new products introduced

Question 12

The motive for creating a budget should guide a manager in choosing the _________ for the budget.

Accepted Answer

A) cost 
B) degree of participation 
C) period 
D) urgency 
A) cost 
B) degree of participation 
C) period 
D) urgency

Question 13

The following budgets are developed in which order (from first to last)?
A = Production budget
B = Direct materials costs budget
C = Budgeted income statement
D = Revenues budget

Accepted Answer

A) DABC 
B) ABDC 
C) DCAB 
D) CABD 
A) DABC 
B) ABDC 
C) DCAB 
D) CABD

Question 14

The usual starting point in budgeting is to forecast net profit.

Accepted Answer

A) True 
 B)False

Question 15

Activity-based-costing analysis makes no distinction between:

Accepted Answer

A) direct-materials inventory and work-in-process inventory. 
B) components of the value chain. 
C) short-run variable costs and short-run fixed costs. 
D) parts of the supply chain. 
A) direct-materials inventory and work-in-process inventory. 
B) components of the value chain. 
C) short-run variable costs and short-run fixed costs. 
D) parts of the supply chain.

Question 16

Answer the following questions using the information below:
The following information pertains to the January operating budget for Canberra Corporation.
∙ Budgeted sales for January $100 000 and for February $200 000.
∙ Collections for sales are 70% in the month of sale and 30% the next month.
∙ Gross margin is 30% of sales.
∙ Administrative costs are $10 000 each month.
∙ Beginning accounts receivable is $20 000.
∙ Beginning inventory is $14 000.
∙ Beginning accounts payable is $60 000.(All from inventory purchases. )
∙ Purchases are paid in full the following month.
∙ Desired ending inventory is 20% of next month's cost of goods sold (COGS).
-At the end of January,budgeted accounts receivable is:

Accepted Answer

A) $20 000. 
B) $30 000. 
C) $60 000. 
D) None of these answers are correct. 
A) $20 000. 
B) $30 000. 
C) $60 000. 
D) None of these answers are correct.

Question 17

Kaizen budgeting allows for budgeting of small incremental increases in costs each budgeting period to adjust for the effects of normal inflation.

Accepted Answer

A) True 
 B)False

Question 18

Port Jackson Manufacturing expects to produce and sell 12 000 units of Big,its only product,for $30 each.Direct material cost is $3 per unit,direct labour cost is $10 per unit,and variable manufacturing overhead is $4 per unit.Fixed manufacturing overhead is $36 000 in total.Variable selling and administrative expenses are $1 per unit,and fixed selling and administrative costs are $3000 in total.According to generally accepted accounting principles,inventoriable cost per unit of Big would be:

Accepted Answer

A) $22.00 per unit. 
B) $17.00 per unit. 
C) $20.00 per unit. 
D) $16.00 per unit. 
A) $22.00 per unit. 
B) $17.00 per unit. 
C) $20.00 per unit. 
D) $16.00 per unit.

Question 19

The master budget expresses management's ________ and financial plans for a specified period.

Accepted Answer

A) strategic 
B) learning 
C) controllable 
D) operating 
A) strategic 
B) learning 
C) controllable 
D) operating

Question 20

Answer the following questions using the information below:
The following information pertains to Reef Producers Company:
 $\begin{array} { l l c } \text { Month } & \text { Sales } & \text { Purchases } \ \text { January } & \$ 48000 & \$ 16000 \ \text { February } & \$ 64000 & \$ 23000 \ \text { March } & \$ 80000 & \$ 38000 \end{array}$

- Cash is collected from customers in the following manner:

$\begin{array}{ll}
\text { Month of sale } & 30 \% \
\text { Month following the sale } & 70 \%
\end{array}$

$40 \%$ of purchases are paid for in cash in the month of purchase, and the balance is paid the following month.
- Labour costs are $20 \%$ of sales. Other operating costs are $\$ 15000$ per month (including $\$ 4000$ of depreciation). Both of these are paid in the month incurred. The cash balance on 1 March is $\$ 4000$. A minimum cash balance of $\$ 3000$ is required at the end of the month. Money can be borrowed in multiples of $\$ 1000$.
-How much cash will be disbursed in total in March?

Accepted Answer

A) $48 200 
B) $21 000 
C) $54 000 
D) $38 000 
A) $48 200 
B) $21 000 
C) $54 000 
D) $38 000

Activity-based budgeting does NOT require:

Budgeting for a multinational company is made more complex due to the possibility of exchange rate fluctuations.

The regional sales office manager of a national firm is MOST likely responsible for a(n):

The cash flow statement does NOT include:

Variances between actual and budgeted amounts can be used to:

Activity-based budgeting includes all the following steps EXCEPT:

Describe some of the drawbacks of using the operating budget as a control device.

Performance reports for responsibility centres are sometimes designed to change managers' behaviour in the direction top management desires even if the reports decrease controllability.

Examples of non-financial budgets include all of the following EXCEPT:

The motive for creating a budget should guide a manager in choosing the _________ for the budget.

The following budgets are developed in which order (from first to last)? A = Production budget B = Direct materials costs budget C = Budgeted income statement D = Revenues budget

The usual starting point in budgeting is to forecast net profit.

Activity-based-costing analysis makes no distinction between:

Kaizen budgeting allows for budgeting of small incremental increases in costs each budgeting period to adjust for the effects of normal inflation.

The master budget expresses management's ________ and financial plans for a specified period.

Management Accounting in Context

Different Costs for Different Purposes

Determining How Costs Behave

Costvolumeprofit Analysis

Estimating the Cost of Producing Services

Estimating the Costs of Products and Inventory

Target Costing, Managing Activities and Managing Capacity

Activity-Based Management and Activity-Based Costing

Pricing and Customer Profitability

Decision Making and Relevant Information

Flexible Budgets, Direct Cost Variances and Management Control

Flexible Budgets, Overhead Cost Variances and Management Control

Allocation of Support-Department Costs, Common Costs and Revenues

Strategy Formation, Strategic Control and the Balanced Scorecard

Quality, Time and the Balanced Scorecard

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

Measuring and Reporting Sustainability

Filters

Exam 11: Budgeting, Management Control and Responsibility Accounting

Activity-based budgeting does NOT require:

Budgeting for a multinational company is made more complex due to the possibility of exchange rate fluctuations.

The regional sales office manager of a national firm is MOST likely responsible for a(n):

The cash flow statement does NOT include:

Variances between actual and budgeted amounts can be used to:

Activity-based budgeting includes all the following steps EXCEPT:

Describe some of the drawbacks of using the operating budget as a control device.

Performance reports for responsibility centres are sometimes designed to change managers' behaviour in the direction top management desires even if the reports decrease controllability.

Examples of non-financial budgets include all of the following EXCEPT:

The motive for creating a budget should guide a manager in choosing the _________ for the budget.

The following budgets are developed in which order (from first to last)? A = Production budget B = Direct materials costs budget C = Budgeted income statement D = Revenues budget

The usual starting point in budgeting is to forecast net profit.

Activity-based-costing analysis makes no distinction between:

Kaizen budgeting allows for budgeting of small incremental increases in costs each budgeting period to adjust for the effects of normal inflation.

The master budget expresses management's ________ and financial plans for a specified period.

Management Accounting in Context

Different Costs for Different Purposes

Determining How Costs Behave

Costvolumeprofit Analysis

Estimating the Cost of Producing Services

Estimating the Costs of Products and Inventory

Target Costing, Managing Activities and Managing Capacity

Activity-Based Management and Activity-Based Costing

Pricing and Customer Profitability

Decision Making and Relevant Information

Flexible Budgets, Direct Cost Variances and Management Control

Flexible Budgets, Overhead Cost Variances and Management Control

Allocation of Support-Department Costs, Common Costs and Revenues

Strategy Formation, Strategic Control and the Balanced Scorecard

Quality, Time and the Balanced Scorecard

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

Measuring and Reporting Sustainability

Filters