Exam 6: Master Budget and Responsibility Accounting

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)________.

The revenues budget is prepared after all other operating budgets are prepared as it is at that point that the amount of projected expenses are known and so a target revenue can be calculated to cover those expenses and provide a target profit.

When administered wisely,budgets promote communication and coordination among the various subunits of the organization.

Financial planning models:

Financial planning software packages assist management with ________.

Data from the revenues budget is utilized in the production budget.

Budgeting is a mechanical tool because the budgeting techniques are free of emotions.

Budgetary slack is the practice of underestimating costs so as to project an optimistic future outlook.

Picture Pretty manufactures picture frames.Sales for August are expected to be 10,000 units of various sizes.Historically,the average frame requires four feet of framing,one square foot of glass,and two square feet of backing.Beginning inventory includes 1,500 feet of framing,500 square feet of glass,and 500 square feet of backing.Current prices are $0.90 per foot of framing,$8.00 per square foot of glass,and $4 per square foot of backing.Ending inventory of materials should be 150% of beginning inventory.Purchases are paid for in the month acquired. Required: a.Determine the quantity of framing,glass,and backing that is to be purchased during August. b.Determine the total costs of direct materials for August purchases.

Even in the face of changing conditions,attaining the original budget is critical and is the only true measure of success.

Which of the following is the most frequently used budget periods used in business?

A company usually prepares a budget for nonmanufacturing costs after preparing all operating budgets.

To determine the predicted results,such as the change in budgeted operating income if there was a decrease in the selling price of a product by 5% and an increase in material costs of 3%.

First Class,Inc. ,expects to sell 29,000 pool cues for $13 each.Direct materials costs are $3,direct manufacturing labor is $5,and manufacturing overhead is $0.83 per pool cue.The following inventory levels apply to 2019: What are the 2019 budgeted costs for direct materials,direct manufacturing labor,and manufacturing overhead,respectively?

Responsibility accounting focuses on control,NOT on information and knowledge.

The following information pertains to the January operating budget for Casey Corporation. At the end of January,budgeted ending inventory is ________.

The order to follow when preparing the operating budget is ________.

A manager of a revenue center is responsible ________.

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

The following information pertains to the January operating budget for Casey Corporation. For January,budgeted cost of goods sold is ________.