Question 1

What is activity-based budgeting?

Accepted Answer

Activity-based budgeting is a budget sys

Question 2

Briefly describe a master budget and the sequence in which the individual budgets within the master budget are prepared.

Accepted Answer

The master budget is the comprehensive p

Question 3

A budget is best described as:

Accepted Answer

A)  A formal statement of a company's future plans usually expressed in monetary terms. 
B)  A master control device. 
C)  An informal statement of company future plans usually expressed in monetary terms. 
D)  The most crucial component of a company evaluation process. 
E)  The minimum acceptable performance level. 
A)  A formal statement of a company's future plans usually expressed in monetary terms. 
B)  A master control device. 
C)  An informal statement of company future plans usually expressed in monetary terms. 
D)  The most crucial component of a company evaluation process. 
E)  The minimum acceptable performance level.

Question 4

The overall coordinating activity of the budget process is the responsibility of the:

Accepted Answer

A)  Chief Accounting Officer. 
B)  Chief Executive Officer (CEO). 
C)  Chief Financial Officer (CFO). 
D)  Budget Committee. 
E)  Board of Directors. 
A)  Chief Accounting Officer. 
B)  Chief Executive Officer (CEO). 
C)  Chief Financial Officer (CFO). 
D)  Budget Committee. 
E)  Board of Directors.

Question 5

Julia's Candy Co. reports the following information from its sales account and sales budget:
$\begin{array}{lr}
\text { Sales }&\text { May } & \$ 105,000 \
&\text { June } & 93,000\\
\text { Expected }&\text { July } & \$ 90,000 \
\text { Sales: } \
&\text { August } & 110,000 \
&\text { September } & 120,000
\end{array}$
Cash sales are normally 25% of total sales and all credit sales are expected to be collected in the month following the date of sale.
-Based on the information from Julia's, the total amount of cash expected to be received from customers in July is:

Accepted Answer

A)  $69,750 
B)  $90,000 
C)  $92,250 
D)  $22,500 
E)  $115,500 
A)  $69,750 
B)  $90,000 
C)  $92,250 
D)  $22,500 
E)  $115,500

Question 6

Pecan Company had March sales and purchases of $63,000 and $47,000 respectively. The company expects April sales to increase 12% above, and purchases to stay consistent with March amounts. Twenty percent of the company's sales are for cash. Credit sales are collected twenty percent in the month of the sale and 80% in the following month. All purchases are paid for in the month following the purchase. The beginning cash balance on April 1 is $42,000. What is Pecan Company's expected cash balance on April 30th?

Accepted Answer

A)  $46,609.60. 
B)  $105,880.00. 
C)  $70,801.60. 
D)  $60,721.60. 
E)  $49,432.00. 
A)  $46,609.60. 
B)  $105,880.00. 
C)  $70,801.60. 
D)  $60,721.60. 
E)  $49,432.00.

Question 7

Berkley Co.'s sales are 10% for cash and 90% on credit. Credit sales are collected as follows: 30% in the month of sale, 50% in the next month, and 20% in the following month. On December 31, the accounts receivable balance includes $12,000 from November sales and $42,000 from December sales.
-Assume that total sales for January are budgeted to be $50,000. What are the expected cash receipts for January from the current and past sales?

Accepted Answer

A)  $18,500 
B)  $51,500 
C)  $51,900 
D)  $55,500 
E)  $60,500 
A)  $18,500 
B)  $51,500 
C)  $51,900 
D)  $55,500 
E)  $60,500

Question 8

A quantity of merchandise or materials over the minimum needed reduce the risk of running short is called:

Accepted Answer

A)  Just-in-time inventory. 
B)  Budgeted stock. 
C)  Continuous inventory. 
D)  Capital stock. 
E)  Safety stock. 
A)  Just-in-time inventory. 
B)  Budgeted stock. 
C)  Continuous inventory. 
D)  Capital stock. 
E)  Safety stock.

Question 9

The master budget includes:

Accepted Answer

A)  Operating budgets and financial budgets. 
B)  A capital expenditures budget and a cash budget. 
C)  A budgeted income statement and a budgeted balance sheet. 
D)  A cash budget and operating budgets. 
E)  Operating budgets, a capital expenditure budget and financial budgets. 
A)  Operating budgets and financial budgets. 
B)  A capital expenditures budget and a cash budget. 
C)  A budgeted income statement and a budgeted balance sheet. 
D)  A cash budget and operating budgets. 
E)  Operating budgets, a capital expenditure budget and financial budgets.

Question 10

A managerial accounting report that presents predicted amounts of the company's revenues and expenses for the budget period is called a:

Accepted Answer

A)  Budgeted income statement. 
B)  Budgeted balance sheet. 
C)  Master plan. 
D)  Rolling income statement. 
E)  Continuous income statement. 
A)  Budgeted income statement. 
B)  Budgeted balance sheet. 
C)  Master plan. 
D)  Rolling income statement. 
E)  Continuous income statement.

Question 11

The budgets within the master budget must be prepared in a definite sequence as dictated by GAAP.

Accepted Answer

A) True 
 B)False

Question 12

Ecology Co. sells a biodegradable product called Dissol and has predicted the following sales for the first four months of the current year: 
$$\begin{array} { c c c c c } 
& \text { Jan. } & \text { Feb. } & \text { March } & \text { April } \
\text { Sales in units } & 1,700 & 1,900 & 2,100 & 1,600
\end{array}$$
Ending inventory for each month should be 20% of the next month's sales, and the December 31 inventory is consistent with that policy. How many units should be purchased in February?

Accepted Answer

A)  1,860 
B)  1,900 
C)  1,940 
D)  1,980 
E)  2,320 
A)  1,860 
B)  1,900 
C)  1,940 
D)  1,980 
E)  2,320

Question 13

Berkley Co.'s sales are 10% for cash and 90% on credit. Credit sales are collected as follows: 30% in the month of sale, 50% in the next month, and 20% in the following month. On December 31, the accounts receivable balance includes $12,000 from November sales and $42,000 from December sales.
-Assume that total sales for January and February are budgeted to be $50,000 and $100,000, respectively. What are the expected cash receipts for February from current and past sales?

Accepted Answer

A)  $80,500 
B)  $71,500 
C)  $34,500 
D)  $61,500 
E)  $59,500 
A)  $80,500 
B)  $71,500 
C)  $34,500 
D)  $61,500 
E)  $59,500

Question 14

Activity-based budgeting is a budget system based on expected activities and their activity levels, which helps management plan for the resources required.

Accepted Answer

A) True 
 B)False

Question 15

The ______________________________ show the budgeted costs for direct materials, direct labor, and overhead, based on the budgeted production volume from the production budget.

Accepted Answer

Manufactur

Question 16

Which of the following is not a benefit of following a well-designed budgeting process?

Accepted Answer

A)  Improved decision-making processes. 
B)  Improved performance evaluations. 
C)  Improved coordination of business activities. 
D)  Assurance of future profits. 
E)  Improved commitment to meet expected performance by those affected. 
A)  Improved decision-making processes. 
B)  Improved performance evaluations. 
C)  Improved coordination of business activities. 
D)  Assurance of future profits. 
E)  Improved commitment to meet expected performance by those affected.

Question 17

A sporting goods store budgeted August purchases of ski jackets at $140,000. The store had ski jackets costing $12,000 in its inventory at the beginning of August; and to cover part of anticipated September sales, they expect to have $25,000 of ski jackets in inventory at the end of the month of August. What is the budgeted cost of goods sold for August?

Accepted Answer

The answer of A sporting goods store budgeted August purchases...

Question 18

Kyoto, Inc. predicts the following sales in units for the coming four months:
$\begin{array}{lr}&\text { April }&\text { May }&\text { June }&\text { July }\ 
\text { Sales in units }&240&280&300&240
\end{array}$

Although each month's ending inventory of finished units should be 60% of the next month's sales, the March 31 finished goods inventory is only 100 units. A finished unit requires five pounds of raw material B. The March 31 raw materials inventory has 200 pounds of B. Each month's ending inventory of raw materials should be 30% of the following month's production needs.
-If each unit of Kyoto's product takes two hours to produce and the labor rate is expected to be $10 per hour, what is the budgeted labor cost for the second quarter?

Accepted Answer

A)  $16,400 
B)  $17,280 
C)  $9,840 
D)  $8,960 
E)  $17,560 
A)  $16,400 
B)  $17,280 
C)  $9,840 
D)  $8,960 
E)  $17,560

What is activity-based budgeting?

Briefly describe a master budget and the sequence in which the individual budgets within the master budget are prepared.

A budget is best described as:

The overall coordinating activity of the budget process is the responsibility of the:

A quantity of merchandise or materials over the minimum needed reduce the risk of running short is called:

The master budget includes:

A managerial accounting report that presents predicted amounts of the company's revenues and expenses for the budget period is called a:

The budgets within the master budget must be prepared in a definite sequence as dictated by GAAP.

Activity-based budgeting is a budget system based on expected activities and their activity levels, which helps management plan for the resources required.

The ______________________________ show the budgeted costs for direct materials, direct labor, and overhead, based on the budgeted production volume from the production budget.

Which of the following is not a benefit of following a well-designed budgeting process?

Introducing Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash and Internal Controls

Accounts and Notes Receivable

Long-Term Assets

Current Liabilities

Long-Term Liabilities

Corporate Reporting and Analysis

Reporting and Analyzing Cash Flows

Analyzing Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Performance Reporting

Flexible Budgets and Standard Costing

Decentralization and Performance Evaluation

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Investments and International Operations

Accounting for Partnerships

Appendix : Accounting With Special Journals

Filters

Exam 20: Master Budgets and Performance Planning

What is activity-based budgeting?

Briefly describe a master budget and the sequence in which the individual budgets within the master budget are prepared.

A budget is best described as:

The overall coordinating activity of the budget process is the responsibility of the:

A quantity of merchandise or materials over the minimum needed reduce the risk of running short is called:

The master budget includes:

A managerial accounting report that presents predicted amounts of the company's revenues and expenses for the budget period is called a:

The budgets within the master budget must be prepared in a definite sequence as dictated by GAAP.

Activity-based budgeting is a budget system based on expected activities and their activity levels, which helps management plan for the resources required.

The ______________________________ show the budgeted costs for direct materials, direct labor, and overhead, based on the budgeted production volume from the production budget.

Which of the following is not a benefit of following a well-designed budgeting process?

Introducing Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash and Internal Controls

Accounts and Notes Receivable

Long-Term Assets

Current Liabilities

Long-Term Liabilities

Corporate Reporting and Analysis

Reporting and Analyzing Cash Flows

Analyzing Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Performance Reporting

Flexible Budgets and Standard Costing

Decentralization and Performance Evaluation

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Investments and International Operations

Accounting for Partnerships

Appendix : Accounting With Special Journals

Filters