Question 1

G__________ congruence occurs when the managers of an entity accept the organisational goals as their own.

Accepted Answer

The answer of G__________ congruence occurs when the managers of...

Question 2

It is not necessary in the control phase of budgeting to:

Accepted Answer

A) Decide on management action 
B) Compare actual performance with budget estimates 
C) Provide timely information to management 
D) Investigate all variances 
A) Decide on management action 
B) Compare actual performance with budget estimates 
C) Provide timely information to management 
D) Investigate all variances

Question 3

Budgeting for a retailer requires a purchases budget to be prepared.When budgeting for a manufacturer the purchases budget is replaced by which budget?

Accepted Answer

A) Expense budget 
B) Budgeted income statement 
C) Production budget 
D) Budgeted cost of sales 
A) Expense budget 
B) Budgeted income statement 
C) Production budget 
D) Budgeted cost of sales

Question 4

A benefit of budgeting is that it helps to c______________ the various segments of the organisation by making each manager aware of how the different activities fit together.

Accepted Answer

The answer of A benefit of budgeting is that it...

Question 5

The following information relates to the 2011 budgets:
$\begin{array} { l r } 
\text { Sales } & \$ 250,000 \
\text { Direct materials purchases } & 35,000 \
\text { Direct Labour } & 50,000 \
\text { Manufacturing overhead } & 80,000 \
\text { Capital Expenditures } & 60,000 \
\text { Finished Goods Inventory } & \
\text { Start of year } & \$ 35,000 \
\text { End of year } & \$ 15,000
\end{array}$
Projected Cost of Sales for 2011 is:

Accepted Answer

A) $185,000 
B) $200,000 
C) $215,000 
D) $235,000 
A) $185,000 
B) $200,000 
C) $215,000 
D) $235,000

Question 6

Virtually every phase of the master budget for a manufacturer is dependent on:

Accepted Answer

A) the cash forecast 
B) the production forecast 
C) the sales forecast 
D) the capital expenditure forecast 
A) the cash forecast 
B) the production forecast 
C) the sales forecast 
D) the capital expenditure forecast

Question 7

Which statement relating to the provision of motivation as a benefit of budgeting is not true?

Accepted Answer

A) When all levels of management participate in preparing the budget it has a better chance of acceptance 
B) The budgeted level of performance should be beyond that attainable with a reasonably amount of effort,to provide employees with a challenge 
C) An improperly prepared budget may have an adverse effect on motivation 
D) To increase the chances of acceptance the budget is best approached from the bottom up 
A) When all levels of management participate in preparing the budget it has a better chance of acceptance 
B) The budgeted level of performance should be beyond that attainable with a reasonably amount of effort,to provide employees with a challenge 
C) An improperly prepared budget may have an adverse effect on motivation 
D) To increase the chances of acceptance the budget is best approached from the bottom up

Question 8

The sales budget for Lyn's Clothing Co for the first three months of the year is expected to be $30,000,$40,000 and $50,000 with 40% of each month's sales being on credit.Collections of accounts receivable are scheduled at 25% during the month of sale,70% during the month following the sale with 5% uncollectable.The total budgeted cash receipts from sales for the second month will be:

Accepted Answer

A) $36,400 
B) $38,000 
C) $43,600 
D) $52,000 
A) $36,400 
B) $38,000 
C) $43,600 
D) $52,000

Question 9

Identify the unfavourable variance.

Accepted Answer

A)  Budgeted income $ \$ 100000 $, actual income $ \$ 105000 $ 
B)  Budgeted expenses $ \$ 80000 $; actual expenses $ \$ 85000 $ 
C)  Budgeted expenses $ \$ 32000 $; actual expenses $ \$ 28000 $ 
D)  Budgeted loss $ \$ 20100 $, actual loss $ \$ 17,500 $ 
A)  Budgeted income $ \$ 100000 $, actual income $ \$ 105000 $ 
B)  Budgeted expenses $ \$ 80000 $; actual expenses $ \$ 85000 $ 
C)  Budgeted expenses $ \$ 32000 $; actual expenses $ \$ 28000 $ 
D)  Budgeted loss $ \$ 20100 $, actual loss $ \$ 17,500 $

Question 10

A budget performance report is being prepared and will be sent to the appropriate segment manager.Which term best describes the type of costs and income that should be included in this report?

Accepted Answer

A) Administrative 
B) Fixed 
C) Unfavourable 
D) Controllable 
A) Administrative 
B) Fixed 
C) Unfavourable 
D) Controllable

Question 11

Tidal Co has the following transactions in 2011,its first year of operations: $\begin{array}{lr} 
& ` 000 \
\text { Total sales (90\% was collected in 2011) } & \$ 1500 \
\text { Amortisation of patents } & 60 \
\text { Payments for expenses } & 1200 \
\text { Payments for income tax } & 90\
\text { Purchases of fixed assets for cash } & 300 \
\text { GST remitted to the tax department } & 100 \
\text { Depreciation of fixed assets } & 80 \
\text { Proceeds from issue of ordinary shares } & 500 \
\text { Proceeds from short-term borrowing } & 50
\end{array}$ What is the cash balance at 31 December 2011?

Accepted Answer

A) $150 000 
B) $170 000 
C) $210 000 
D) $280 000 
A) $150 000 
B) $170 000 
C) $210 000 
D) $280 000

Question 12

The primary purpose of a budget is:

Accepted Answer

A) To show how resources will be acquired and used 
B) To determine which managers are not doing a good job 
C) To identify who should be promoted 
D) To find the cheapest source of supplies and expenses 
A) To show how resources will be acquired and used 
B) To determine which managers are not doing a good job 
C) To identify who should be promoted 
D) To find the cheapest source of supplies and expenses

Question 13

A b_____________ is a detailed plan that shows how resources are expected to be acquired and used during a specified time period.

Accepted Answer

The answer of A b_____________ is a detailed plan that...

Question 14

The direct labour budget is developed from:

Accepted Answer

A) The cash budget 
B) The production budget 
C) The materials budget 
D) The budgeted income statement 
A) The cash budget 
B) The production budget 
C) The materials budget 
D) The budgeted income statement

Question 15

If budgeted sales revenue is $210,000 and actual sales revenue is $250,000,and budgeted expenses are $125,000 and actual expenses are $172,000,the profit variance for the period is:

Accepted Answer

A) $87,000F 
B) $87,000U 
C) $7,000 F 
D) $7,000 U 
A) $87,000F 
B) $87,000U 
C) $7,000 F 
D) $7,000 U

Question 16

The best explanation of goal congruence is

Accepted Answer

A) All segments working towards the overall goals set by the organisation 
B) Telling lower levels of management what to do and how to do it 
C) Rewarding managers who reach their performance targets 
D) All the companies in an industry working together to solve problems 
A) All segments working towards the overall goals set by the organisation 
B) Telling lower levels of management what to do and how to do it 
C) Rewarding managers who reach their performance targets 
D) All the companies in an industry working together to solve problems

Question 17

Radak Inc plans to produce 30 000 units per month during 2011.Sales are projected at 25 000 for January and will increase 4% per month thereafter.There are zero units on hand at 1 January 2011.How many units will be on hand at 28 February 2011?

Accepted Answer

A) 5,000 
B) 9,000 
C) 11,960 
D) 13,000 
A) 5,000 
B) 9,000 
C) 11,960 
D) 13,000

Question 18

Virtually every phase of the master budget is dependent on the s__________ forecast.

Accepted Answer

The answer of Virtually every phase of the master budget...

Question 19

The untrue statement is:

Accepted Answer

A) A properly prepared budget is a motivating device 
B) An improperly prepared budget can have a negative effect on motivation 
C) Managers should be given sole responsibility for setting their own budget targets so that they are motivated to achieve these targets 
D) The budgeted level of performance should be attainable with a reasonably efficient amount of effort. 
A) A properly prepared budget is a motivating device 
B) An improperly prepared budget can have a negative effect on motivation 
C) Managers should be given sole responsibility for setting their own budget targets so that they are motivated to achieve these targets 
D) The budgeted level of performance should be attainable with a reasonably efficient amount of effort.

Question 20

Which of these is part of the financial set of budgets?

Accepted Answer

A) Production budget 
B) Sales budget 
C) Expense budget 
D) Cash budget 
A) Production budget 
B) Sales budget 
C) Expense budget 
D) Cash budget

Exam 12: Budgeting for Planning and Control

G__________ congruence occurs when the managers of an entity accept the organisational goals as their own.

It is not necessary in the control phase of budgeting to:

Budgeting for a retailer requires a purchases budget to be prepared.When budgeting for a manufacturer the purchases budget is replaced by which budget?

A benefit of budgeting is that it helps to c______________ the various segments of the organisation by making each manager aware of how the different activities fit together.

The following information relates to the 2011 budgets: Sales \ 250,000 Direct materials purchases 35,000 Direct Labour 50,000 Manufacturing overhead 80,000 Capital Expenditures 60,000 Finished Goods Inventory Start of year \ 35,000 End of year \ 15,000 Projected Cost of Sales for 2011 is:

Virtually every phase of the master budget for a manufacturer is dependent on:

Which statement relating to the provision of motivation as a benefit of budgeting is not true?

Identify the unfavourable variance.

A budget performance report is being prepared and will be sent to the appropriate segment manager.Which term best describes the type of costs and income that should be included in this report?

The primary purpose of a budget is:

A b_____________ is a detailed plan that shows how resources are expected to be acquired and used during a specified time period.

The direct labour budget is developed from:

If budgeted sales revenue is $210,000 and actual sales revenue is $250,000,and budgeted expenses are $125,000 and actual expenses are $172,000,the profit variance for the period is:

The best explanation of goal congruence is

Radak Inc plans to produce 30 000 units per month during 2011.Sales are projected at 25 000 for January and will increase 4% per month thereafter.There are zero units on hand at 1 January 2011.How many units will be on hand at 28 February 2011?

Virtually every phase of the master budget is dependent on the s__________ forecast.

The untrue statement is:

Which of these is part of the financial set of budgets?

Decision Making and the Role of Accounting

Financial Statements for Decision Making

Recording Transactions

Adjusting the Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Retailing

Accounting for Systems

Accounting for Manufacturing

Cost Accounting Systems

Cash Management and Internal Control

Cost-Volume-Profit Analysis for Decision Making

Performance Evaluation for Managers

Differential Analysis,profitability Analysis and Capital Budgeting

Partnerships: Formation,operation and Reporting

Companies: Formation and Operations

Regulation and the Conceptual Framework

Receivables

Inventories

Non-Current Assets: Acquisition and Depreciation

Non-Current Assets: Revaluation,disposal and Other Aspects

Liabilities

Presentation of Financial Statements

Liabilities

Analysis and Interpretation of Financial Statements

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