Question 1

On a production budget, what is the basic formula for computing the required production for a certain period of time?

Accepted Answer

The answer of On a production budget, what is the...

Question 2

Tunstall Manufacturing sells medical supplies, including stethoscopes. On September 30, the company had 3,000 stethoscopes in inventory. The company's policy is to maintain an inventory equal to 15% of next month's sales. The company expects the following sales activity for the fourth quarter of the year:   In addition, January sales for the following year are projected to be 30,000 stethoscopes. What is the total required production for the fourth quarter?

Accepted Answer

A)  72,500 stethoscopes 
B)  69,500 stethoscopes 
C)  75,500 stethoscopes 
D)  68,000 stethoscopes 
A)  72,500 stethoscopes 
B)  69,500 stethoscopes 
C)  75,500 stethoscopes 
D)  68,000 stethoscopes

Question 3

Woodsman Inc. produces a variety of wood finishing products including gallons of varnish that it manufactures and packages under its own name. The company has computed the required production of gallons of varnish it will need for the first three months of 2013 as follows:   Each gallon of varnish requires 10 ounces of a special chemical. This chemical costs $.25 per ounce. The company has determined that it needs 20 percent of next month's raw material needs on hand at the end of each month.
The cost of the direct material that should be purchased in February is:

Accepted Answer

A)  $920,000 
B)  $950,000 
C)  $880,000 
D)  $850,000 
A)  $920,000 
B)  $950,000 
C)  $880,000 
D)  $850,000

Question 4

Avery Inc. would like to prepare a summary cash budget for June. The following information is available:   What is the cash balance at the end of June expected to be?

Accepted Answer

A)  $15,000 
B)  $12,000 
C)  $26,000 
D)  $29,000 
A)  $15,000 
B)  $12,000 
C)  $26,000 
D)  $29,000

Question 5

Which of the following budgets would probably not be prepared using information provided by the production budget?

Accepted Answer

A)  Direct materials budget 
B)  Direct labor budget 
C)  Manufacturing overhead budget 
D)  Sales budget 
A)  Direct materials budget 
B)  Direct labor budget 
C)  Manufacturing overhead budget 
D)  Sales budget

Question 6

Diamonde Products Inc. would like to prepare a summary cash budget for the second quarter of 2013. The following information regarding operating activities from the cash receipts and cash disbursements budgets are available:   The following information is also available:
  What is the cash balance at the end of June expected to be?

Accepted Answer

A)  $1,000 
B)  $7,000 
C)  $9,000 
D)  $5,000 
A)  $1,000 
B)  $7,000 
C)  $9,000 
D)  $5,000

Question 7

Porcelain Interiors sells a variety of porcelain products including porcelain sinks. On December 31, the company had 75 sinks in inventory. The company's policy is to maintain a sink inventory equal to 10% of next month's expected sales. The company expects the following sales activity for the first quarter of the year:   What is the projected production for February?

Accepted Answer

A)  1,115 sinks 
B)  1,015 sinks 
C)  985 sinks 
D)  1,215 sinks 
A)  1,115 sinks 
B)  1,015 sinks 
C)  985 sinks 
D)  1,215 sinks

Question 8

Holmes Manufacturing Inc. had the following purchases budgeted for the last six months of 2013:   Holmes pays one-half of a month's purchases in the month of purchase and the remainder in the following month. What are expected total cash disbursements for the last quarter of 2013?

Accepted Answer

A)  $112,500 
B)  $225,000 
C)  $182,500 
D)  $208,500 
A)  $112,500 
B)  $225,000 
C)  $182,500 
D)  $208,500

Question 9

For a manufacturing company, which of the following budgets does not have to be prepared before a budgeted income statement is prepared?

Accepted Answer

A)  Budgeted cost of goods manufactured 
B)  Budgeted cost of goods sold 
C)  Budgeted balance sheet 
D)  Sales budget 
A)  Budgeted cost of goods manufactured 
B)  Budgeted cost of goods sold 
C)  Budgeted balance sheet 
D)  Sales budget

Question 10

Which of the following statements regarding cash flows is true?

Accepted Answer

A)  Many managers consider cash flow budgets to be the least important of all the budgets. 
B)  As long as accounting revenues exceed accounting expenses, cash flow budgets do not have to be prepared. 
C)  It is possible for cash receipts to exceed revenues earned in a given month. 
D)  As long as a manager is confident that there will eventually be a cash receipt from a customer, the timing of the cash receipt is not important. 
A)  Many managers consider cash flow budgets to be the least important of all the budgets. 
B)  As long as accounting revenues exceed accounting expenses, cash flow budgets do not have to be prepared. 
C)  It is possible for cash receipts to exceed revenues earned in a given month. 
D)  As long as a manager is confident that there will eventually be a cash receipt from a customer, the timing of the cash receipt is not important.

Question 11

Vestal Products Inc. had the following information available for 2013:   How many units should Vestal's 2013 flexible sales budget be based upon?

Accepted Answer

A)  96,000 units 
B)  102,000 units 
C)  98,000 units 
D)  90,000 units 
A)  96,000 units 
B)  102,000 units 
C)  98,000 units 
D)  90,000 units

Question 12

Which of the following statements regarding budgeting is false?

Accepted Answer

A)  The focus of budgeting is planning. 
B)  Many companies use enterprise resource planning (ERP) systems as a budgeting tool. 
C)  Budgeting is a bookkeeping task. 
D)  Budgeting helps managers determine the resources needed to meet their goals and objectives. 
A)  The focus of budgeting is planning. 
B)  Many companies use enterprise resource planning (ERP) systems as a budgeting tool. 
C)  Budgeting is a bookkeeping task. 
D)  Budgeting helps managers determine the resources needed to meet their goals and objectives.

Question 13

In the budgeting process, which budget is typically prepared first?

Accepted Answer

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

Question 14

Which of the following statements regarding budgets is true?

Accepted Answer

A)  They rarely use estimates. 
B)  They should not be used for performance evaluations. 
C)  They should focus on past performance. 
D)  They will likely require the input of more than one manager. 
A)  They rarely use estimates. 
B)  They should not be used for performance evaluations. 
C)  They should focus on past performance. 
D)  They will likely require the input of more than one manager.

Question 15

Managers use budgets for three types of activities. Describe and give a brief example of each of these three activities.

Accepted Answer

The answer of Managers use budgets for three types of...

Question 16

Blooming Products Inc. sells flower bulbs to local nurseries. Each bag of bulbs sells for $2. The company's accountant has prepared the following sales forecast (in bags) for the fourth quarter of 2013:   Historically, the cash collection of sales has been as follows: 50 percent in the month of sale, 40 percent in the month following sale, and 10 percent in the second month following sale.
Cash receipts for December are expected to be:

Accepted Answer

A)  $13,800 
B)  $ 8,000 
C)  $16,200 
D)  $ 8,100 
A)  $13,800 
B)  $ 8,000 
C)  $16,200 
D)  $ 8,100

Question 17

Griswald Inc. would like to prepare a summary cash budget for the first quarter of 2013. The following information from the cash receipts and cash disbursements budgets are available:   The company has a beginning cash balance on January 1, 2013 of $5,000. No other receipts and disbursements in the first quarter are expected. What is the cash balance at the end of March expected to be?

Accepted Answer

A)  $14,000 
B)  $19,000 
C)  $ 9,000 
D)  $34,000 
A)  $14,000 
B)  $19,000 
C)  $ 9,000 
D)  $34,000

Question 18

There are many advantages of budgeting. List four of these advantages.

Accepted Answer

Advantages

Question 19

Ligon Enterprises has prepared a production budget for October. Management has determined that the total required production for October is 800,000 units when an ending inventory of 10,000 units is desired and the beginning inventory is 6,000 units. Based on the above information, what were October's budgeted sales?

Accepted Answer

A)  806,000 units 
B)  796,000 units 
C)  804,000 units 
D)  794,000 units 
A)  806,000 units 
B)  796,000 units 
C)  804,000 units 
D)  794,000 units

Question 20

Which type(s) of activities are static budgets less useful for?

Accepted Answer

A)  Operating activities 
B)  Control activities 
C)  Planning activities 
D)  Both control and planning activities 
A)  Operating activities 
B)  Control activities 
C)  Planning activities 
D)  Both control and planning activities

On a production budget, what is the basic formula for computing the required production for a certain period of time?

Avery Inc. would like to prepare a summary cash budget for June. The following information is available: What is the cash balance at the end of June expected to be?

Which of the following budgets would probably not be prepared using information provided by the production budget?

Holmes Manufacturing Inc. had the following purchases budgeted for the last six months of 2013: Holmes pays one-half of a month's purchases in the month of purchase and the remainder in the following month. What are expected total cash disbursements for the last quarter of 2013?

For a manufacturing company, which of the following budgets does not have to be prepared before a budgeted income statement is prepared?

Which of the following statements regarding cash flows is true?

Vestal Products Inc. had the following information available for 2013: How many units should Vestal's 2013 flexible sales budget be based upon?

Which of the following statements regarding budgeting is false?

In the budgeting process, which budget is typically prepared first?

Which of the following statements regarding budgets is true?

Managers use budgets for three types of activities. Describe and give a brief example of each of these three activities.

There are many advantages of budgeting. List four of these advantages.

Which type(s) of activities are static budgets less useful for?

Introduction to Managerial Accounting

Product Costing: Manufacturing Processes, Cost Terminology, and Cost Flows

Job Costing, Process Costing, and Operations Costing

Activity-Based Costing

Cost Behavior

Cost-Volume-Profit Analysis

Relevant Costs and Product Planning Decisions

Long-Term Capital Investment Decisions

Variance Analysis A Tool for Cost Control and Performance Evaluation

Decentralization, Performance Evaluation, and the Balanced Scorecard

Financial Statement Analysis

The Statement of Cash Flows

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Exam 9: The Use of Budgets in Planning and Decision Making

On a production budget, what is the basic formula for computing the required production for a certain period of time?

Avery Inc. would like to prepare a summary cash budget for June. The following information is available: What is the cash balance at the end of June expected to be?

Which of the following budgets would probably not be prepared using information provided by the production budget?

Holmes Manufacturing Inc. had the following purchases budgeted for the last six months of 2013: Holmes pays one-half of a month's purchases in the month of purchase and the remainder in the following month. What are expected total cash disbursements for the last quarter of 2013?

For a manufacturing company, which of the following budgets does not have to be prepared before a budgeted income statement is prepared?

Which of the following statements regarding cash flows is true?

Vestal Products Inc. had the following information available for 2013: How many units should Vestal's 2013 flexible sales budget be based upon?

Which of the following statements regarding budgeting is false?

In the budgeting process, which budget is typically prepared first?

Which of the following statements regarding budgets is true?

Managers use budgets for three types of activities. Describe and give a brief example of each of these three activities.

There are many advantages of budgeting. List four of these advantages.

Which type(s) of activities are static budgets less useful for?

Introduction to Managerial Accounting

Product Costing: Manufacturing Processes, Cost Terminology, and Cost Flows

Job Costing, Process Costing, and Operations Costing

Activity-Based Costing

Cost Behavior

Cost-Volume-Profit Analysis

Relevant Costs and Product Planning Decisions

Long-Term Capital Investment Decisions

Variance Analysis A Tool for Cost Control and Performance Evaluation

Decentralization, Performance Evaluation, and the Balanced Scorecard

Financial Statement Analysis

The Statement of Cash Flows

Filters