Question 1

Increased global competition has resulted in many companies moving their operations to other countries to be closer to new markets.

Accepted Answer

A) True 
 B)False

Question 2

The following information was obtained from Fizz Company:
$$\begin{array} { | l | l | } 
\hline \text { Advertising costs } & \$ 10,800 \
\hline \text { Indirect labour } & 7000 \
\hline \text { CEO's salary } & 47,000 \
\hline \text { Direct labour } & 60,000 \
\hline \text { Indirect materials } & 6500 \
\hline \text { Direct materials used } & 41,000 \
\hline \text { Factory utilities } & 540 \
\hline \text { Factory janitorial costs } & 3000 \
\hline \text { Manufacturing equipment depreciation } & 2000 \
\hline \text { Delivery vehicle depreciation } & 1120 \
\hline \text { Administrative wages and salaries } & 31,900 \
\hline
\end{array}$$
How much were Fizz's period costs?

Accepted Answer

A)  $89,700 
B)  $90,820 
C)  $11,920 
D)  $120,040

Question 3

Repair and maintenance costs for factory equipment are inventoriable product costs.

Accepted Answer

A) True 
 B)False

Question 4

On 30 June 2017,Alpha Company's cash balance is $4,000.Alpha is now preparing its cash budget for the third quarter of 2017.The following data is provided:

The amount of cash that should be shown in the budgeted balance sheet as on 30 September would be:

Accepted Answer

A)  $22,958. 
B)  $7854. 
C)  $55,958. 
D)  $6958.

Question 5

The wages and benefits of the sales staff are inventoriable product costs.

Accepted Answer

A) True 
 B)False

Question 6

Accounting standards require companies to treat inventoriable product costs as an asset until the product is sold.

Accepted Answer

A) True 
 B)False

Question 7

A company has prepared the operational budget and the cash budget and is now preparing the budgeted balance sheet.To provide the balance for Accounts receivable,which document should be used?

Accepted Answer

A)  Cash budget 
B)  Inventory, purchases and cost of sales budget 
C)  Electricity and gas budget 
D)  Sales budget plus budgeted cash collections

Question 8

The budgeted "Cash payments for purchases" must be completed before the "Inventory,Purchases and Cost of sales budget" can be prepared.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following would probably be considered an indirect material cost in a bakery?

Accepted Answer

A)  Flour 
B)  Spices 
C)  Milk 
D)  Eggs

Question 10

Barricades Company provided the following information for the year 2017:
$$\begin{array} { | l | l | } 
\hline \text { Beginning balance -work in process inventory } & \$ 27,000 \
\hline \text { Ending balance - work in process inventory } & 57,000 \
\hline \text { Beginning balance - raw materials inventory } & 87,000 \
\hline \text { Ending balance - raw materials inventory } & 61,000 \
\hline \text { Purchases - raw materials } & 359,000 \
\hline \text { Direct labour } & 471,000 \
\hline \text { Indirect materials } & 47,000 \
\hline \text { Indirect labour } & 19,000 \
\hline \text { Depreciation on factory plant \& equipment } & 25,000 \
\hline \text { Plant electricity, gas \& insurance } & 272,000 \
\hline
\end{array}$$
What was the total manufacturing costs incurred during the year 2017?

Accepted Answer

A)  $748,000 
B)  $1,219,000 
C)  $363,000 
D)  $856,000

Question 11

Which of the following describes the operating expenses budget?

Accepted Answer

A)  It depicts the breakdown of sales based on terms of collection. 
B)  It captures the variable and fixed expenses of the business. 
C)  It helps in planning to ensure the business has adequate cash. 
D)  It aids in planning to ensure the company has adequate inventory on hand.

Question 12

Chaterlain Company is preparing its budget for the third quarter.The cash balance on 30 June was $34,000.Additional budgeted data is provided here:
$$\begin{array} { | l | l | l | l | } 
\hline & \text { Jul } & { \text { Aug } } & \text { Sep } \
\hline \text { Cash collections } & \$ 51,000 & \$ 56,000 & \$ 53,000 \
\hline \text { Cash payments } & & & \
\hline \text { Purchases of inventory } & 22,000 & 23,000 & 21,000 \
\hline \text { Operating expenses } & 32,000 & 26,000 & 34,000 \
\hline \text { Capital expenditures } & 10,000 & 5000 & 5000 \
\hline
\end{array}$$
What amount should be shown in the cash budget for the cash balance at the end of July?

Accepted Answer

A)  $21,000 
B)  $85,000 
C)  $30,000 
D)  $13,000

Question 13

Which of the following describes the sales budget?

Accepted Answer

A)  It aids in planning to ensure the company has adequate inventory on hand. 
B)  It represents a breakdown of total sales for each product by multiplying the price by the total projected units to be sold. 
C)  It helps in planning to ensure the business has adequate cash. 
D)  It captures the variable and fixed expenses of the business.

Question 14

A goal of the budgeting process is to assist managers with coordinating and implementing the business plan.

Accepted Answer

A) True 
 B)False

Question 15

During the past century,many developed economies have shifted their focus from a service economy to a manufacturing economy.

Accepted Answer

A) True 
 B)False

Question 16

Charter Company is preparing their budget for the first quarter of 2017.The following data is provided:

For the budgeted balance sheet at 31 March,what amount should be shown for Inventory?

Accepted Answer

A)  $10 700 
B)  $8 750 
C)  $9 500 
D)  $9 800

Question 17

In order to prepare a budgeted income statement,several other budgets need to be prepared first.Which of the following is NOT one of the budgets needed to prepare the budgeted income statement?

Accepted Answer

A)  Sales 
B)  Electricity and gas 
C)  Capital expenditures 
D)  Inventory, purchases and cost of sales

Question 18

Repair and maintenance costs of vehicles used to deliver products to the customers are inventoriable product costs.

Accepted Answer

A) True 
 B)False

Question 19

Management is accountable to its employees in which of the following ways?

Accepted Answer

A)  Providing a return on the stakeholders' investment 
B)  Providing a safe workplace 
C)  Ensuring the business is environmentally responsible for impacts on the community 
D)  Providing products that are safe and free of defects

Question 20

Which of the following statements is TRUE about the financial budget?

Accepted Answer

A)  It includes the sales budget. 
B)  It must be completed before the budgeted income statement is prepared. 
C)  It includes the cash budget and the budgeted balance sheet. 
D)  It includes the capital expenditures budget.

Exam 19: Introduction to Managerial Accounting and the Master Budget

Increased global competition has resulted in many companies moving their operations to other countries to be closer to new markets.

Repair and maintenance costs for factory equipment are inventoriable product costs.

On 30 June 2017,Alpha Company's cash balance is $4,000.Alpha is now preparing its cash budget for the third quarter of 2017.The following data is provided: The amount of cash that should be shown in the budgeted balance sheet as on 30 September would be:

The wages and benefits of the sales staff are inventoriable product costs.

Accounting standards require companies to treat inventoriable product costs as an asset until the product is sold.

A company has prepared the operational budget and the cash budget and is now preparing the budgeted balance sheet.To provide the balance for Accounts receivable,which document should be used?

The budgeted "Cash payments for purchases" must be completed before the "Inventory,Purchases and Cost of sales budget" can be prepared.

Which of the following would probably be considered an indirect material cost in a bakery?

Which of the following describes the operating expenses budget?

Which of the following describes the sales budget?

A goal of the budgeting process is to assist managers with coordinating and implementing the business plan.

During the past century,many developed economies have shifted their focus from a service economy to a manufacturing economy.

Charter Company is preparing their budget for the first quarter of 2017.The following data is provided: For the budgeted balance sheet at 31 March,what amount should be shown for Inventory?

In order to prepare a budgeted income statement,several other budgets need to be prepared first.Which of the following is NOT one of the budgets needed to prepare the budgeted income statement?

Repair and maintenance costs of vehicles used to deliver products to the customers are inventoriable product costs.

Management is accountable to its employees in which of the following ways?

Which of the following statements is TRUE about the financial budget?