Acc 2100 Final Budgeting

Long-range planning usually encompasses a period of A) a year. B) at least two years. C) a quarter. D) at least five years.

Which one of the following is not a benefit of budgeting? A) It requires all levels of management to plan ahead on a recurring basis. B) It provides definite objectives for evaluating performance. C) It facilitates the coordination of activities. D) It provides assurance that the company will achieve its objectives.

Which one of the following is a primary benefit of budgeting? A) It eliminates potential problems so that managers do not need to be concerned that things may get out of hand. B) It eliminates the need for coordination of activities throughout the company. C) It removes the 'plan ahead' from lower level managers so that they can focus on operations. D) It provides definite objectives for evaluating performance.

Which of the following is not a benefit of budgeting? A) Management can plan ahead. B) It enables disciplinary action to be taken at every level of responsibility. C) An early warning system is provided for potential problems. D) The coordination of activities is facilitated.

The primary benefits of budgeting include all of the following except it A) motivates personnel throughout the organization. B) requires only top management to plan ahead and formalize goals. C) creates an early warning system for potential problems. D) provides definite objectives for evaluating performance.

Which one of the following is necessary if a company expects its budget to be effective? A) The company's budget should be a good substitute for management. B) Managers must be held responsible for controllable and uncontrollable costs. C) The company must have a sound organizational structure. D) The budget amounts must be based on those of previous accounting periods.

Compared to budgeting, long-range planning generally has the A) same amount of detail. B) longer time period. C) same emphasis. D) same time period.

The most common budget period is a A) week. B) month. C) quarter. D) year.

Which of the following lists includes only financial budgets? A) Budgeted balance sheet, cash budget, and the capital expenditures budget. B) Capital expenditure budget, sales budget, and budgeted income statement. C) Budgeted income statement, budgeted balance sheet, and sales budget. D) Cash budget, production budget, and capital expenditures budget.

A sales budget is A) management's best estimate of sales revenue for the year. B) not the starting point for the master budget. C) prepared only for credit sales. D) derived from the production budget

The formula for the production budget is budgeted sales in units plus A) desired ending finished goods units less beginning finished goods units. B) desired ending merchandise inventory less beginning merchandise inventory. C) beginning finished goods units less desired ending finished goods units. D) desired ending direct materials units less beginning direct materials units.

Operating budgets include all of the following except the A) budgeted income statement. B) production budget. C) sales budget. D) capital expenditure budget.

Each of the other budgets in the master budget depends on the A) production budget. B) cash budget. C) sales budget. D) budgeted income statement.

At the beginning of the year, Goldenrod had beginning inventory of 2,000 scooters. Goldenrod estimates it will sell 5,000 units during the first quarter of the current year, with a 10% increase in sales each quarter. It is Goldenrod's policy to maintain an ending inventory equal to 20% of the next quarter's budgeted sales. Each scooter costs $100 to produce and sold for $150. How much is the budgeted sales revenue for the third quarter of the current year? A) $907,500. B) $500,000. C) $825,000. D) $605,000.

Microtech plans to sell 2,000 computers in April; 1,900 in May; and 2,000 in June. The company keeps 15% of the next month's sales as ending inventory. How many units should Microtech produce in May? A) Amount cannot be determined due to insufficient information. B) 1,915. C) 2,200. D) 1,885.

Each of the following budgets is used in preparing the budgeted income statement except the A) direct labor budget. B) sales budget. C) selling and administrative budget. D) capital expenditure budget.

41) Drew Enterprises reports all its sales on credit, and pays operating costs in the month incurred. Estimated amounts for the months of June through October are: June July August September October Budgeted sales $310,000$330,000$300,000$280,000$260,000 Budgeted purchases $144,000 $120,000 $128,000 $132,000 $90,000 Customer amounts on account are collected 60% in the month of sale and 40% in the following month. Cost of goods sold is 45% of sales. Drew purchases and pays for merchandise 30% in the month of acquisition and 70% in the following month. How much cash is budgeted to be received during August? A) $318,000. B) $312,000. C) $180,000. D) $291,000.

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The format of a cash budget is A) Beginning cash balance + Cash revenues -Cash expenses = Ending cash balance. B) Beginning cash balance + Cash receipts - Cash disbursements +/- Financing = Ending cash balance. C) Beginning cash balance + Cash receipts + Cash from financing - Cash disbursements = Ending cash balance. D) Beginning cash balance + Net income- Cash dividends = Ending cash balance.

Expected direct materials purchases in Read Company are $70,000 in the first quarter and $90,000 in the second quarter. Forty percent of the purchases are paid in cash as incurred, and the balance is paid in the following quarter. The budgeted cash payments for purchases in the second quarter are Entry field with correct answer A) $96,000. B) $90,000. C) $72,000. D) $78,000.

Financial budgets consist of all of the following except the A) cash budget. B) capital expenditure budget. C) budgeted income statement. D) budgeted balance sheet.

The cash budget contains sections for each of the following except A) cash receipts. B) capital expenditures. C) financing. D) cash disbursements

At the beginning of the year, Opal Company has a cash balance of $23,000. During the year, the company expects cash disbursements of $160,000, and cash receipts of $140,000. If Opal Company requires an ending cash balance of $20,000, how much must the company borrow? A) $40,000. B) $17,000. C) $0. D) $20,000.

Budgetary control involves A) developing the budget. B) analyzing differences between actual and budget. C) taking corrective action. D) all of these options are part of budgetary control.

Ace Company monitors its managers' performance using a static budget. Which one of the following situations will provide the fairest evaluation for those managers? A) When activity levels fluctuate from month to month. B) When the company performs at the same activity level as the static budget level. C) When the actual costs incurred equal the amounts on the budget. D) When the master budget activity is less than the actual activity.

For which of the following costs is a static budget most appropriate? A)Actual costs. B)Uncontrollable costs. C)Fixed overhead costs. D)Variable overhead costs

A static budget is A) never appropriate in evaluating a manager's effectiveness in controlling costs. B) a projection of budget data at a single level of activity. C) a projection of budget data at several levels of activity within the relevant range of activity. D) compared to a flexible budget in a budget report.

A static budget is useful in controlling costs when cost behavior is A)linear. B)mixed. C)fixed. D)variable.

A projection of budget data at one level of activity is a A) fixed budget. B) flexible budget. C) static budget. D)variable budget.

A static budget report is appropriate for A)variable selling and administrative expenses. B)fixed manufacturing costs only. C)fixed manufacturing costs and fixed selling & administrative expenses. D)fixed selling and administrative expenses only.

What budgeted amounts appear on the flexible budget report? A)Original budgeted amounts at the static budget activity level. B)Budgeted amounts for the actual activity level achieved. C)Actual costs for the budgeted activity level. D)Actual costs for the estimated activity level.

At 9,000 direct labor hours, the flexible budget for indirect materials is $27,000. If $28,000 of indirect materials costs are incurred at 9,200 direct labor hours, the flexible budget report should show the following difference for indirect materials A)$400 unfavorable. B)$1,000 favorable. C)$400 favorable. D)$1,000 unfavorable.

A projection of budget data for various levels of activity is a A)fixed budget. B)variable budget. C)flexible budget. D)static budget.

In-Step Manufacturing uses a flexible budget. It has the following budgeted manufacturing costs for 25,000 pairs of shoes: Fixed Manufacturing Costs, $12,000 and Variable Manufacturing Costs, $16.00 per pair of shoes. If In-Step Manufacturing makes 20,000 pairs of shoes this month, what are the total budgeted manufacturing cost for the month? A)$400,000. B)$332,000. C)$320,000. D)$412,000.

The processing department has monthly budgeted manufacturing overhead of $180,000 plus $3.00 per machine hour. If a flexible budget report shows $348,000 for total budgeted manufacturing overhead costs for the month, what was the actual level of activity achieved during the month? A)176,000 machine hours. B)56,000 machine hours. C)116,000 machine hours. D)Cannot be determined from the data given.

hat is the difference between a budget and a standard? Entry field with correct answer A)A budget is the amount planned, while a standard reflects the actual results. B)A budget is a total amount, while a standard expresses only a unit amount. C)There is no difference. They are the same. D)A budget is the cost of an item at a static activity level, while a standard is based on a flexible activity level.

What is a standard cost? A)The total amount that appears on the flexible budget as the cost of producing products. B)The actual cost incurred to produce a good or service. C)The amount management thinks that should be incurred to produce a good or service. D)The total number of units to be produced times the unit cost expected for production.

Standards differ from budgets in that A)budgets are a total amount and standards are a unit amount. B)budgets but not standards may be journalized and posted. C)only budgets contribute to management planning and control. D)budgets but not standards may be used in valuing inventories.

Normal standards A)represent level of performance under perfect operating conditions. B)are rarely used because managers believe they lower workforce morale. C)allow for rest periods, machine breakdowns, and setup time. D)are more likely than ideal standards to result in unethical practices.

The setting of standards is A)a management decision. B)preferably set at the ideal level of performance. C)a worker decision. D)a managerial accounting decision.

Standards based on the optimum level of performance under perfect operating conditions are A)ideal standards. B)attainable standards. C)normal standards. D)practical standards.

Most companies that use standards set them at a(n) A)normal level. B)optimum level. C)ideal level. D)practical level.

The direct materials price standard should include an amount for all of the following except A)receiving costs. B)handling costs. C)normal spoilage costs. D)storing costs.

The direct labor quantity standard should make allowances for all of the following except A)rest periods. B)cleanup. C)machine downtime. D)all of these options.