Question 1

Which of the following is the basic formula of the direct materials usage budget?

Accepted Answer

A) Ending inventory of direct materials + direct materials purchased and used during the period = direct materials to be used this period 
B) Beginning inventory of direct materials + direct materials purchased and used during the period = direct materials to be used this period 
C) units used in production + target ending inventory - beginning inventory = purchases to be made for the budget period 
D) units used in production + target beginning inventory - ending inventory = purchases to be made for the budget period 
A) Ending inventory of direct materials + direct materials purchased and used during the period = direct materials to be used this period 
B) Beginning inventory of direct materials + direct materials purchased and used during the period = direct materials to be used this period 
C) units used in production + target ending inventory - beginning inventory = purchases to be made for the budget period 
D) units used in production + target beginning inventory - ending inventory = purchases to be made for the budget period

Question 2

Activity-based budgeting ________.

Accepted Answer

A) uses one cost driver such as direct labor-hours 
B) uses only output-based cost drivers such as units sold 
C) focuses on activities necessary to produce and sell products and services 
D) classifies costs by functional area within the value chain 
A) uses one cost driver such as direct labor-hours 
B) uses only output-based cost drivers such as units sold 
C) focuses on activities necessary to produce and sell products and services 
D) classifies costs by functional area within the value chain

Question 3

In which order are the following developed? First to last:

Accepted Answer

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

Question 4

The district director of 5 mortgage origination offices staffed by bank associates who cold call potential customers in an attempt to gain home mortgage and home equity loan business is most likely responsible for 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 5

The Japanese use the term kaizen when referring to________.

Accepted Answer

A) scarce resources 
B) pro forma financial statements 
C) continuous improvement 
D) the sales forecast 
A) scarce resources 
B) pro forma financial statements 
C) continuous improvement 
D) the sales forecast

Question 6

Which of the following is true of master budgets?

Accepted Answer

A) They include only financial aspects of a plan and exclude nonfinancial aspects. 
B) Includes both financial and nonfinancial aspects of management's plans. 
C) They aid in quantifying the expectations of all stakeholders. 
D) They must be administered rigidly after they are committed to. 
A) They include only financial aspects of a plan and exclude nonfinancial aspects. 
B) Includes both financial and nonfinancial aspects of management's plans. 
C) They aid in quantifying the expectations of all stakeholders. 
D) They must be administered rigidly after they are committed to.

Question 7

The following information pertains to Amigo Corporation:

Required:
a.Prepare a summary of cash collections for the 4th quarter.
b.Prepare a summary of cash disbursements for the 4th quarter.

Accepted Answer

a.Cash collections Oct $36,448

Question 8

It is best to compare this year's performance with last year's actual performance rather than this year's budget.

Accepted Answer

A) True 
 B)False

Question 9

Kaizen refers to incorporating cost reductions ________.

Accepted Answer

A) in each successive budgeting period 
B) in each successive sales forecast 
C) in all customer service centers 
D) in all areas of the organization 
A) in each successive budgeting period 
B) in each successive sales forecast 
C) in all customer service centers 
D) in all areas of the organization

Question 10

The following information pertains to Monroe Company:

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

Question 11

Sensitivity analysis helps managers evaluate risks ________.

Accepted Answer

A) by showing the effects of changes to the original data or an underlying assumption 
B) by identifying inconsistencies in underlying assumptions and actual conditions 
C) by removing the effects of foreign currency exposure and other uncontrollable factors 
D) by identifying gaps in the production process using information on setups needed to manufacture products 
A) by showing the effects of changes to the original data or an underlying assumption 
B) by identifying inconsistencies in underlying assumptions and actual conditions 
C) by removing the effects of foreign currency exposure and other uncontrollable factors 
D) by identifying gaps in the production process using information on setups needed to manufacture products

Question 12

Allscott Company is developing its budgets for 2019 and,for the first time,will use the kaizen approach.The initial 2019 income statement,based on static data from 2018,is as follows:

Selling prices for 2019 are expected to increase by 8%,and sales volume in units will decrease by 10%.The cost of goods sold as estimated by the kaizen approach will decline by 10% per unit.Other than depreciation,all other operating costs are expected to decline by 5%.
Required:
Prepare a kaizen-based budgeted income statement for 2019.

Accepted Answer

@#IMG-DLM&_TB5540_00_TB5540_00

Question 13

Advanced Enterprises reports year-end information from 2018 as follows:
 
Advanced is developing the 2019 budget.In 2019 the company would like to increase selling prices by 13.5%,and as a result expects a decrease in sales volume of 9%.All other operating expenses are expected to remain constant.Assume that cost of goods sold is a variable cost and that operating expenses are a fixed cost.
What is budgeted sales for 2019?

Accepted Answer

A) $1,090,735 
B) $961,000 
C) $992,569 
D) $874,510 
A) $1,090,735 
B) $961,000 
C) $992,569 
D) $874,510

Question 14

Computer-based systems,such as ERP systems,cannot perform calculations for financial planning models.

Accepted Answer

A) True 
 B)False

Question 15

To reduce budgetary slack management may ________.

Accepted Answer

A) incorporate stretch or challenge targets 
B) use external benchmark performance measures 
C) award bonuses for achieving budgeted amounts 
D) reduce projected cost targets by 10% across all areas 
A) incorporate stretch or challenge targets 
B) use external benchmark performance measures 
C) award bonuses for achieving budgeted amounts 
D) reduce projected cost targets by 10% across all areas

Question 16

Nantucket Industries manufactures and sells two models of watches,Prime and Luxuria.It expects to sell 3,200 units of Prime and 1,300 units of Luxuria in 2019.The following estimates are given for 2019:
 
Nantucket had an inventory of 230 units of Prime and 85 units of Luxuria at the end of 2018.It has decided that as a measure to counter stock outages it will maintain ending inventory of 370 units of Prime and 200 units of Luxuria.
Each Luxuria watch requires one unit of Crimpson and has to be imported at a cost of $11.There were 140 units of Crimpson in stock at the end of 2018.The management does not want to have any stock of Crimpson at the end of 2019.
How many units of Prime watches must be produced in 2019?

Accepted Answer

A) 3,570 units 
B) 3,340 units 
C) 3,200 units 
D) 2,970 units 
A) 3,570 units 
B) 3,340 units 
C) 3,200 units 
D) 2,970 units

Question 17

The major objectives of a budgeting process should include all of the following EXCEPT:

Accepted Answer

A) providing coordination among the subunits 
B) providing communication among the subunits 
C) providing unyielding commitment to targets as a means to achieve a target profit 
D) providing a framework for judging performance and facilitating learning 
A) providing coordination among the subunits 
B) providing communication among the subunits 
C) providing unyielding commitment to targets as a means to achieve a target profit 
D) providing a framework for judging performance and facilitating learning

Question 18

Which of the following is a financial budget?

Accepted Answer

A) budgeted balance sheet 
B) cash receivables budget 
C) production budget 
D) cost of goods sold budget 
A) budgeted balance sheet 
B) cash receivables budget 
C) production budget 
D) cost of goods sold budget

Question 19

Budgeted financial statements are called pro forma statements.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following statements is true about activity-based budgeting?

Accepted Answer

A) activity-based budgeting estimates total costs more accurately than cost-based budgeting 
B) activity-based budgeting provides more detailed information than cost-based budgeting 
C) activity-based budgeting is cheaper than cost-based budgeting 
D) activity-based budgeting is simpler to implement than cost-based budgeting 
A) activity-based budgeting estimates total costs more accurately than cost-based budgeting 
B) activity-based budgeting provides more detailed information than cost-based budgeting 
C) activity-based budgeting is cheaper than cost-based budgeting 
D) activity-based budgeting is simpler to implement than cost-based budgeting

Which of the following is the basic formula of the direct materials usage budget?

Activity-based budgeting ________.

In which order are the following developed? First to last:

The district director of 5 mortgage origination offices staffed by bank associates who cold call potential customers in an attempt to gain home mortgage and home equity loan business is most likely responsible for a(n)________.

The Japanese use the term kaizen when referring to________.

Which of the following is true of master budgets?

The following information pertains to Amigo Corporation: Required: a.Prepare a summary of cash collections for the 4th quarter. b.Prepare a summary of cash disbursements for the 4th quarter.

It is best to compare this year's performance with last year's actual performance rather than this year's budget.

Kaizen refers to incorporating cost reductions ________.

The following information pertains to Monroe Company: How much cash will be collected from customers in March?

Sensitivity analysis helps managers evaluate risks ________.

Computer-based systems,such as ERP systems,cannot perform calculations for financial planning models.

To reduce budgetary slack management may ________.

The major objectives of a budgeting process should include all of the following EXCEPT:

Which of the following is a financial budget?

Budgeted financial statements are called pro forma statements.

Which of the following statements is true about activity-based budgeting?

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

Which of the following is the basic formula of the direct materials usage budget?

Activity-based budgeting ________.

In which order are the following developed? First to last:

The district director of 5 mortgage origination offices staffed by bank associates who cold call potential customers in an attempt to gain home mortgage and home equity loan business is most likely responsible for a(n)________.

The Japanese use the term kaizen when referring to________.

Which of the following is true of master budgets?

The following information pertains to Amigo Corporation: Required: a.Prepare a summary of cash collections for the 4th quarter. b.Prepare a summary of cash disbursements for the 4th quarter.

It is best to compare this year's performance with last year's actual performance rather than this year's budget.

Kaizen refers to incorporating cost reductions ________.

The following information pertains to Monroe Company: How much cash will be collected from customers in March?

Sensitivity analysis helps managers evaluate risks ________.

Computer-based systems,such as ERP systems,cannot perform calculations for financial planning models.

To reduce budgetary slack management may ________.

The major objectives of a budgeting process should include all of the following EXCEPT:

Which of the following is a financial budget?

Budgeted financial statements are called pro forma statements.

Which of the following statements is true about activity-based budgeting?

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