Question 1

Which of the following is referred to as the bottom-up aspect of the budgeting process?

Accepted Answer

A) lower-level managers setting their individual targets that aggregate to be the company-wide target 
B) senior managers consulting middle- and lower-level managers to investigate any deviations from the budget 
C) lower-level managers implementing the budgets with senior managers monitoring progress and investigating deviations 
D) lower-level managers providing inputs to the budgeting process based on their specialized knowledge and familiarity of the operation 
A) lower-level managers setting their individual targets that aggregate to be the company-wide target 
B) senior managers consulting middle- and lower-level managers to investigate any deviations from the budget 
C) lower-level managers implementing the budgets with senior managers monitoring progress and investigating deviations 
D) lower-level managers providing inputs to the budgeting process based on their specialized knowledge and familiarity of the operation

Question 2

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 3

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 4

First Class,Inc. ,expects to sell 28,000 pool cues for $14 each.Direct materials costs are $3,direct manufacturing labor is $5,and manufacturing overhead is $0.82 per pool cue.The following inventory levels apply to 2019:
 
How many pool cues need to be produced in 2019?

Accepted Answer

A) 30,800 cues 
B) 29,300 cues 
C) 29,500 cues 
D) 26,500 cues 
A) 30,800 cues 
B) 29,300 cues 
C) 29,500 cues 
D) 26,500 cues

Question 5

Cost-based budgeting is a budgeting method that focuses on the budgeted cost of the activities necessary to produce and sell products and services.

Accepted Answer

A) True 
 B)False

Question 6

Estate Corp. ,has the following information:
 
Purchases are paid for in the following manner:
 
What is the expected balance in Accounts Payable as of March 31?

Accepted Answer

A) $37,290 
B) $14,250 
C) $2,910 
D) $25,650 
A) $37,290 
B) $14,250 
C) $2,910 
D) $25,650

Question 7

Which of the following departments is most likely to be a cost center?

Accepted Answer

A) sales department of a company selling industrial tools 
B) call center of a company that serves customers and cross-sells other products 
C) maintenance department of a luxury resort 
D) research department of a company providing consultancy services 
A) sales department of a company selling industrial tools 
B) call center of a company that serves customers and cross-sells other products 
C) maintenance department of a luxury resort 
D) research department of a company providing consultancy services

Question 8

Which of the following best describes a bill of materials?

Accepted Answer

A) It is a document that is prepared by a vendor to invoice a manufacturer for a purchase of materials 
B) It is a document that is used to order materials 
C) It is a document that requests materials be removed from the warehouse and put into production 
D) It is a document that identifies how each product is manufactured,specifying materials and components and the quantities of materials in each finished good 
A) It is a document that is prepared by a vendor to invoice a manufacturer for a purchase of materials 
B) It is a document that is used to order materials 
C) It is a document that requests materials be removed from the warehouse and put into production 
D) It is a document that identifies how each product is manufactured,specifying materials and components and the quantities of materials in each finished good

Question 9

The ________ is required to prepare the cash budget of an organization.

Accepted Answer

A) statement of shareholders' equity 
B) budgeted balance sheet 
C) capital expenditures budget 
D) budgeted statement of cash flow 
A) statement of shareholders' equity 
B) budgeted balance sheet 
C) capital expenditures budget 
D) budgeted statement of cash flow

Question 10

Russell Company has the following projected account balances for June 30,2018:
   
Required:
a.Prepare a budgeted income statement for June 2018
b.Prepare a budgeted balance sheet as of June 30,2018.

Accepted Answer

a.Russell Company
 @#IMG-DLM&_TB5540_00_TB5540_00

Question 11

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 12

First Class,Inc. ,expects to sell 26,000 pool cues for $14 each.Direct materials costs are $2,direct manufacturing labor is $4,and manufacturing overhead is $0.89 per pool cue.The following inventory levels apply to 2019:
 
On the 2019 budgeted income statement,what amount will be reported for cost of goods sold?

Accepted Answer

A) $189,475 
B) $179,140 
C) $168,805 
D) $201,877 
A) $189,475 
B) $179,140 
C) $168,805 
D) $201,877

Question 13

Budgeting based on cost for specific activities is a key building block of the master budget for companies that use the Kaizen approach.

Accepted Answer

A) True 
 B)False

Question 14

The Japanese use kaizen to mean financing alternatives.

Accepted Answer

A) True 
 B)False

Question 15

The ________ is a component of financial budgets.

Accepted Answer

A) cost of goods sold budget 
B) budgeted income statement 
C) direct materials budget 
D) budgeted statement of cash flows 
A) cost of goods sold budget 
B) budgeted income statement 
C) direct materials budget 
D) budgeted statement of cash flows

Question 16

Wallace Company provides the following data for next year:
 
The gross profit rate is 30% of sales.Inventory at the end of December is $30,600 and target ending inventory levels are 10% of next month's sales,stated at cost.
What is the amount of purchases budgeted for February?

Accepted Answer

A) $36,180 
B) $77,700 
C) $79,310 
D) $97,580 
A) $36,180 
B) $77,700 
C) $79,310 
D) $97,580

Question 17

J & S Manufacturing expects to produce and sell 13,000 units of Big,its only product,for $20 each.Direct material cost is $3 per unit,direct labor cost is $14 per unit,and variable manufacturing overhead is $10 per unit.Fixed manufacturing overhead is $26,000 in total.Variable selling and administrative expenses are $3 per unit,and fixed selling and administrative costs are $3,000 in total.According to generally accepted accounting principles,inventoriable cost per unit of Big would be ________.

Accepted Answer

A) $17.00 per unit 
B) $20.00 per unit 
C) $29.00 per unit 
D) $27.00 per unit 
A) $17.00 per unit 
B) $20.00 per unit 
C) $29.00 per unit 
D) $27.00 per unit

Question 18

Budgets are sometimes called targets or commitments by some companies and as such are "set in stone" to provide effective benchmarks for management.

Accepted Answer

A) True 
 B)False

Question 19

A company using responsibility accounting system decides to exclude all uncontrollable costs from a manager's performance report.Jenson is the machine supervisor.Which of the following costs will impact Jenson's performance report?

Accepted Answer

A) rent and taxes paid on by the company 
B) cost of materials used in manufacture 
C) direct labor cost 
D) cost of power consumed by the plant 
A) rent and taxes paid on by the company 
B) cost of materials used in manufacture 
C) direct labor cost 
D) cost of power consumed by the plant

Question 20

Listed below are elements of the master budget.Determine whether each budget is an operating budget or a financial budget.Place an O for operating budget or F for a financial budget.

Accepted Answer

@#IMG-DLM&_TB5540_00

Exam 6: Master Budget and Responsibility Accounting

Which of the following is referred to as the bottom-up aspect of the budgeting process?

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

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 ________.

First Class,Inc. ,expects to sell 28,000 pool cues for $14 each.Direct materials costs are $3,direct manufacturing labor is $5,and manufacturing overhead is $0.82 per pool cue.The following inventory levels apply to 2019: How many pool cues need to be produced in 2019?

Cost-based budgeting is a budgeting method that focuses on the budgeted cost of the activities necessary to produce and sell products and services.

Estate Corp. ,has the following information: Purchases are paid for in the following manner: What is the expected balance in Accounts Payable as of March 31?

Which of the following departments is most likely to be a cost center?

Which of the following best describes a bill of materials?

The ________ is required to prepare the cash budget of an organization.

Russell Company has the following projected account balances for June 30,2018: Required: a.Prepare a budgeted income statement for June 2018 b.Prepare a budgeted balance sheet as of June 30,2018.

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

Budgeting based on cost for specific activities is a key building block of the master budget for companies that use the Kaizen approach.

The Japanese use kaizen to mean financing alternatives.

The ________ is a component of financial budgets.

Wallace Company provides the following data for next year: The gross profit rate is 30% of sales.Inventory at the end of December is $30,600 and target ending inventory levels are 10% of next month's sales,stated at cost. What is the amount of purchases budgeted for February?

Budgets are sometimes called targets or commitments by some companies and as such are "set in stone" to provide effective benchmarks for management.

A company using responsibility accounting system decides to exclude all uncontrollable costs from a manager's performance report.Jenson is the machine supervisor.Which of the following costs will impact Jenson's performance report?

Listed below are elements of the master budget.Determine whether each budget is an operating budget or a financial budget.Place an O for operating budget or F for a financial budget.

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

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