Question 1

The order to follow when preparing the operating budget is:

Accepted Answer

A) revenues budget,production budget,and direct manufacturing labour costs budget. 
B) revenues budget,manufacturing overhead costs budget,and production budget. 
C) cash expenditures budget,revenues budget,and production budget. 
D) costs of goods sold budget,production budget,and cash budget. 
A) revenues budget,production budget,and direct manufacturing labour costs budget. 
B) revenues budget,manufacturing overhead costs budget,and production budget. 
C) cash expenditures budget,revenues budget,and production budget. 
D) costs of goods sold budget,production budget,and cash budget.

Question 2

Science-based carbon-reduction targets are stretched to:

Accepted Answer

A) spur innovation. 
B) arrest the development of new technologies and business models. 
C) minimise exposure to foreign currency fluctuations. 
D) evaluate performance more subjectively. 
A) spur innovation. 
B) arrest the development of new technologies and business models. 
C) minimise exposure to foreign currency fluctuations. 
D) evaluate performance more subjectively.

Question 3

Operating decisions deal with how to best use the limited resources of an organisation.

Accepted Answer

A) True 
 B)False

Question 4

Financial analysts use the projected cash flow statement to do all of the following EXCEPT:

Accepted Answer

A) project depreciation expense. 
B) plan for short-term cash investments. 
C) plan for when excess cash is generated. 
D) project cash shortages and plan a strategy to deal with the shortages. 
A) project depreciation expense. 
B) plan for short-term cash investments. 
C) plan for when excess cash is generated. 
D) project cash shortages and plan a strategy to deal with the shortages.

Question 5

Answer the following questions using the information below:
Margaret River Enterprises are using the kaizen approach to budgeting for 2018.The budgeted income statement for January 2018 is as follows:
 $\begin{array}{lr}
\text { Sales (84 000 units) } & \$ 700000 \
\text { Less: Cost of goods sold } & \underline{500000} \
& \
\text { Gross margin } & 200000 \
\text { Operating expenses (includes } \$ 50000 \text { of fixed costs) } & \underline{150000} \
& \
\text { Operating profit } & \$ 50000
\end{array}$
 Under the kaizen approach,cost of goods sold and variable operating expenses are budgeted to decline by 1% per month.
-What is budgeted gross margin for March 2018?

Accepted Answer

A) $198 000 
B) $196 020 
C) $204 020 
D) $209 950 
A) $198 000 
B) $196 020 
C) $204 020 
D) $209 950

Question 6

The sales forecast should be PRIMARILY based on:

Accepted Answer

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

Question 7

Answer the following questions using the information below:
The following information pertains to the January operating budget for Brindabella Corporation,a retailer:
Budgeted sales are $300 000 for January
Collections of sales are 50% in the month of sale and 50% the next month
Cost of goods sold averages 70% of sales
Merchandise purchases total $250 000 in January
Marketing costs are $3000 each month
Distribution costs are $5000 each month
Administrative costs are $10 000 each month
-For January,the amount budgeted for the non-manufacturing costs budget is:

Accepted Answer

A) $168 000. 
B) $10 000. 
C) $78 000. 
D) $18 000. 
A) $168 000. 
B) $10 000. 
C) $78 000. 
D) $18 000.

Question 8

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 $\$ 1000$.
-What is the ending cash balance for March?

Accepted Answer

A) $3000 
B) $3200 
C) ($25 000) 
D) $18 800 
A) $3000 
B) $3200 
C) ($25 000) 
D) $18 800

Question 9

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 cost of goods sold?

Accepted Answer

A) $88 500 
B) $105 000 
C) $90 000 
D) $91 500 
A) $88 500 
B) $105 000 
C) $90 000 
D) $91 500

Question 10

Which of the following regarding operating budgets and financial budgets is TRUE?

Accepted Answer

A) Combined from the master budget 
B) Are prepared after the master budget 
C) Are prepared before the master budget 
D) Have nothing to do with the master budget 
A) Combined from the master budget 
B) Are prepared after the master budget 
C) Are prepared before the master budget 
D) Have nothing to do with the master budget

Question 11

________ includes a budgeted cash flow statement and a budgeted balance sheet.

Accepted Answer

A) The operating budget 
B) The capital expenditures budget 
C) An annual report 
D) The financial budget 
A) The operating budget 
B) The capital expenditures budget 
C) An annual report 
D) The financial budget

Question 12

Albury Enterprises reports year-end information from 2018 as follows:
 $$\begin{array} { l r } 
\text { Sales ( } 80000 \text {  units) } & \$ 640000 \
\text { Cost of goods sold } & \underline { 40000 } \\
\text { Gross margin }  & 160000 \
\text { Operating expenses }& \underline { 130000 } \\
\text { Operating expenses } & \$ 30000
\end{array}$$
 Albury is developing the 2019 budget.In 2019 the company would like to increase selling prices by 8%,and as a result expects a decrease in sales volume of 10%.All other operating expenses are expected to remain constant.Assume that COGS is a variable cost and that operating expenses are a fixed cost.
-Should Albury increase the selling price in 2019?

Accepted Answer

A) Yes,because operating profit is increased for 2019. 
B) No,because sales volume decreases for 2019. 
C) Yes,because sales revenue is increased for 2019. 
D) No,because gross margin decreases for 2019. 
A) Yes,because operating profit is increased for 2019. 
B) No,because sales volume decreases for 2019. 
C) Yes,because sales revenue is increased for 2019. 
D) No,because gross margin decreases for 2019.

Question 13

A budget can do all of the following EXCEPT:

Accepted Answer

A) determine actual profitability. 
B) motivate managers. 
C) promote coordination among subunits. 
D) motivate employees. 
A) determine actual profitability. 
B) motivate managers. 
C) promote coordination among subunits. 
D) motivate employees.

Question 14

Molonglo Industries produces two products,Deluxe and Supreme.Molonglo expects to sell 10 000 units of product Supreme and to have an inventory of 2000 units of Supreme on hand at the end of the period.Currently,Molonglo has 800 units of Supreme on hand.Supreme requires two labour operations,moulding and polishing.Each unit of Supreme requires one hour of moulding and two hours of polishing.The direct labour rate for moulding is $20 per moulding hour and the direct labour rate for polishing is $25 per polishing hour.The expected number of hours of direct labour for Supreme is:

Accepted Answer

A) 17 600 hours of moulding;8800 hours of polishing. 
B) 11 200 hours of moulding;22 400 hours of polishing. 
C) 8800 hours of moulding;17 600 hours of polishing. 
D) 22 400 hours of moulding;11 200 hours of polishing. 
A) 17 600 hours of moulding;8800 hours of polishing. 
B) 11 200 hours of moulding;22 400 hours of polishing. 
C) 8800 hours of moulding;17 600 hours of polishing. 
D) 22 400 hours of moulding;11 200 hours of polishing.

Question 15

Answer the following questions using the information below:
Beds4us Inc.estimates the following number of mattress sales for the first four months of 2018:
 $$\begin{array} { l r } 
\text { Month } & \text { Sales } \
\text { January } & 6000 \
\text { February } & 8500 \
\text { March } & 7500 \
\text { April } & 7500
\end{array}$$ Finished goods inventory at the end of December is 1500 units.Target ending finished goods inventory is 30% of the next month's sales.
-How many mattresses need to be produced in January 2018?

Accepted Answer

A) 7100 mattresses 
B) 7050 mattresses 
C) 7500 mattresses 
D) 5400 mattresses 
A) 7100 mattresses 
B) 7050 mattresses 
C) 7500 mattresses 
D) 5400 mattresses

Question 16

After management has agreed upon and finalised the budget,the amounts should not be changed for any reason.

Accepted Answer

A) True 
 B)False

Question 17

Because of the possibility of exchange rate fluctuations,managers of multinational corporations should ignore subjective factors in their performance evaluations.

Accepted Answer

A) True 
 B)False

Question 18

A revenues budget is the usual last step in preparing the operating budget.

Accepted Answer

A) True 
 B)False

Question 19

Answer the following questions using the information below:
Cathfree Inc.expects to sell 35 000 athletic uniforms for $70 each in 2018.Direct materials costs are $20,direct manufacturing labour is $8,and manufacturing overhead is $6 for each uniform.The following inventory levels apply to 2017:
 $$\begin{array} { l r r } 
& \text { Beginning inventory } & \text { Ending inventory } \
\text { Direct materials } & 12000 \text { units } & 10000 \text { units } \
\text { Work-in-process inventory } & 0 \text { units } & 0 \text { units } \
\text { Finished goods inventory } & 6000 \text { units } & 5000 \text { units }
\end{array}$$
-What is the amount budgeted for direct material purchases in 2018?

Accepted Answer

A) $640 000 
B) $760 000 
C) $600 000 
D) $580 000 
A) $640 000 
B) $760 000 
C) $600 000 
D) $580 000

Question 20

Few businesses plan to fail,but many of those that don't succeed have failed to plan.

Accepted Answer

A) True 
 B)False

The order to follow when preparing the operating budget is:

Science-based carbon-reduction targets are stretched to:

Operating decisions deal with how to best use the limited resources of an organisation.

Financial analysts use the projected cash flow statement to do all of the following EXCEPT:

The sales forecast should be PRIMARILY based on:

Which of the following regarding operating budgets and financial budgets is TRUE?

________ includes a budgeted cash flow statement and a budgeted balance sheet.

A budget can do all of the following EXCEPT:

After management has agreed upon and finalised the budget,the amounts should not be changed for any reason.

Because of the possibility of exchange rate fluctuations,managers of multinational corporations should ignore subjective factors in their performance evaluations.

A revenues budget is the usual last step in preparing the operating budget.

Few businesses plan to fail,but many of those that don't succeed have failed to plan.

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

The order to follow when preparing the operating budget is:

Science-based carbon-reduction targets are stretched to:

Operating decisions deal with how to best use the limited resources of an organisation.

Financial analysts use the projected cash flow statement to do all of the following EXCEPT:

The sales forecast should be PRIMARILY based on:

Which of the following regarding operating budgets and financial budgets is TRUE?

________ includes a budgeted cash flow statement and a budgeted balance sheet.

A budget can do all of the following EXCEPT:

After management has agreed upon and finalised the budget,the amounts should not be changed for any reason.

Because of the possibility of exchange rate fluctuations,managers of multinational corporations should ignore subjective factors in their performance evaluations.

A revenues budget is the usual last step in preparing the operating budget.

Few businesses plan to fail,but many of those that don't succeed have failed to plan.

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