Question 1

As the volume of output increases:

Accepted Answer

A)  Variable costs per unit will increase.
B)  Variable costs per unit will decrease.
C)  Variable costs per unit will not change.
D)  Variable costs in total will decrease.

Question 2

Which of the following is not a characteristic of the total quality approach to setting budgetary targets?

Accepted Answer

A)  Absolute efficiency
B)  A perception that the budget is fair
C)  Budgetary targets that are unattainable
D)  Budgeted performance expectations that cannot be exceeded

Question 3

Cash receipts budget
The director of budgeting for Bond Products is beginning the process of preparing a cash budget for each month of the coming year.The sales forecast for the month of January is as follows:  In the past,the accounts receivable originating from credit sales have been collected in the following pattern:
  Credit sales in the last two months of the current year,some of which remain uncollected at year-end,were as follows:  Compute the amount of cash expected to be collected from customers in January of the coming year.

Accepted Answer

The answer of Cash receipts budget
The director of budgeting for...

Question 4

When budgeted amounts are set at reasonable and achievable levels:

Accepted Answer

A)  They reflect a "total quality management" philosophy of management.
B)  A highly efficient department should fall slightly short of budget standards.
C)  Meeting the budgeted amounts ensures a maximum level of profitability.
D)  Failure to stay within the budget is viewed as an unacceptable level of performance.

Question 5

Which element of a master budget would normally be prepared first?

Accepted Answer

A)  A production budget
B)  A cash budget
C)  A budget of operating expenses
D)  A sales forecast

Question 6

[The following information applies to the questions displayed below.]
Ross Corporation makes all sales on account.The June 30th balance sheet balance in its accounts receivable is $400,000,of which $240,000 pertain to sales that were made during June.Budgeted sales for July are $1,250,000.Ross collects 70% of sales in the month of sale;20% in the following month;and the final 10% in the second month after the sale.
-What are Ross's budgeted collections for July?

Accepted Answer

A)  $1,275,000
B)  $939,000
C)  $1,195,000
D)  $915,000

Question 7

[The following information applies to the questions displayed below.]
The following information is from the manufacturing budget and budgeted financial statements of Altman Corp.:
 
-For the year,budgeted cash payments to suppliers amounted to:

Accepted Answer

A)  $344,000.
B)  $350,000.
C)  $334,000.
D)  $354,000.

Question 8

Which of the following is not considered an operating budget?

Accepted Answer

A)  Manufacturing cost budget
B)  Production schedule
C)  Capital expenditures budget
D)  Sales forecast

Question 9

Mentha Company currently has the following statistics: Days in accounts receivable - 68
Operating cycle - 148
What is Mentha's days in inventory?

Accepted Answer

A)  80 days
B)  68 days
C)  148 days
D)  Cannot be determined from the information given

Question 10

Budgeted debt service costs
On April 1,Fisher Corporation borrowed $400,000 from its bank by signing a 9%,5-year note payable.The note calls for 60 monthly payments of $6,150,which includes both interest and principal components.
(a)Interest expense budgeted for April amounts to: $________
(b)The carrying value of the note to be reported in the company's budgeted balance sheet as of April 30 is: $________
(c)Interest expense budgeted for May amounts to (round to nearest whole dollar): $________
(d)The carrying value of the note to be reported in the company's budgeted balance sheet as of May 31 is (round to nearest whole dollar): $________

Accepted Answer

(a)$3,000
...

Question 11

[The following information applies to the questions displayed below.]
On October 1 of the current year,Molloy Corporation prepared a cash budget for October,November,and December.All of Molloy's sales are made on account.The following information was used in preparing estimated cash collections:
  Approximately 60% of all sales are collected in the month of the sale,30% is collected in the following month,and 10% is collected in the month thereafter.
-Budgeted collections from customers in October total:

Accepted Answer

A)  $39,000.
B)  $27,000.
C)  $31,000.
D)  $110,000.

Question 12

A flexible budget:

Accepted Answer

A)  Consists of estimates of costs and expenses for various possible levels of activity.
B)  Is designed to be adjusted at frequent intervals for changes in the general price level.
C)  Is better suited for use with a job cost system than a standard cost system.
D)  Cannot be prepared when a standard cost system is in use.

Question 13

A flexible budget allows management to spend more or less for labor and materials without regard to the amount of production.

Accepted Answer

A) True 
 B)False

Question 14

The total quality management approach to budgeting sets budgeted amounts at levels that can be achieved through reasonably efficient operations.

Accepted Answer

A) True 
 B)False

Question 15

A flexible budget is one that:

Accepted Answer

A)  Is revised monthly in the light of changing business conditions.
B)  Is a compromise plan reflecting diverse views of various supervisors.
C)  Contains estimated cost data for several different levels of activity.
D)  Separates factory overhead between the variable and fixed portions.

Question 16

Explain what is meant by "profit rich,yet cash poor."

Accepted Answer

Companies must often tie up large sums o...

Question 17

The benefits of budgeting include all of the following except:

Accepted Answer

A)  Enabling the company to produce more for less cost.
B)  Assigning responsibility for situations that require corrective action.
C)  Coordinating activities between departments within the organization.
D)  Creating standards for evaluating performance.

Question 18

The master budget may be comprised of:

Accepted Answer

A)  The production budget.
B)  The current period income statement.
C)  The current period balance sheet.
D)  The current period statement of cash flows.

Question 19

Which of the following is not a benefit of a careful and thorough budgeting process?

Accepted Answer

A)  Budgeting increases management's awareness of the company's external economic environment.
B)  Budgeted net income assures the company of operating profitably.
C)  The budget may provide advance warning of pending problems.
D)  Budgets provide a yardstick for evaluating future performance.

Question 20

The production schedule in units:

Accepted Answer

A)  Cannot be prepared until the budgeted income statement is completed.
B)  Is dependent upon the sales forecast for the period.
C)  Is based upon the manufacturing cost budget,that is,upon the level of funds available for manufacturing costs.
D)  Is the starting point in the preparation of the master budget.

Exam 23: Operational Budgeting

As the volume of output increases:

Correct Answer
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Correct Answer
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Which of the following is not a benefit of a careful and thorough budgeting process?

Correct Answer
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Explain what is meant by "profit rich,yet cash poor."

Correct Answer
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Companies must often tie up large sums o...
View Answer

The production schedule in units:

Correct Answer
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When budgeted amounts are set at reasonable and achievable levels:

Correct Answer
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The benefits of budgeting include all of the following except:

Correct Answer
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Which of the following is not considered an operating budget?

Correct Answer
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Which element of a master budget would normally be prepared first?

Correct Answer
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A flexible budget is one that:

Correct Answer
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The master budget may be comprised of:

Correct Answer
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A flexible budget:

Correct Answer
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The total quality management approach to budgeting sets budgeted amounts at levels that can be achieved through reasonably efficient operations.

Correct Answer
verified

[The following information applies to the questions displayed below.] The following information is from the manufacturing budget and budgeted financial statements of Altman Corp.: -For the year,budgeted cash payments to suppliers amounted to:

Correct Answer
verified

Mentha Company currently has the following statistics: Days in accounts receivable - 68 Operating cycle - 148 What is Mentha's days in inventory?

Correct Answer
verified

A flexible budget allows management to spend more or less for labor and materials without regard to the amount of production.

Correct Answer
verified

Correct Answer
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Correct Answer
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Which of the following is not a characteristic of the total quality approach to setting budgetary targets?

Correct Answer
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Correct Answer
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(a)$3,000
...
View Answer

Exam 23: Operational Budgeting

As the volume of output increases:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is not a benefit of a careful and thorough budgeting process?

Correct AnswerverifiedShow Answer

Explain what is meant by "profit rich,yet cash poor."

Correct AnswerverifiedCompanies must often tie up large sums o...View AnswerShow Answer

The production schedule in units:

Correct AnswerverifiedShow Answer

When budgeted amounts are set at reasonable and achievable levels:

Correct AnswerverifiedShow Answer

The benefits of budgeting include all of the following except:

Correct AnswerverifiedShow Answer

Which of the following is not considered an operating budget?

Correct AnswerverifiedShow Answer

Which element of a master budget would normally be prepared first?

Correct AnswerverifiedShow Answer

A flexible budget is one that:

Correct AnswerverifiedShow Answer

The master budget may be comprised of:

Correct AnswerverifiedShow Answer

A flexible budget:

Correct AnswerverifiedShow Answer

The total quality management approach to budgeting sets budgeted amounts at levels that can be achieved through reasonably efficient operations.

Correct AnswerverifiedShow Answer

[The following information applies to the questions displayed below.] The following information is from the manufacturing budget and budgeted financial statements of Altman Corp.: -For the year,budgeted cash payments to suppliers amounted to:

Correct AnswerverifiedShow Answer

Mentha Company currently has the following statistics: Days in accounts receivable - 68 Operating cycle - 148 What is Mentha's days in inventory?

Correct AnswerverifiedShow Answer

A flexible budget allows management to spend more or less for labor and materials without regard to the amount of production.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is not a characteristic of the total quality approach to setting budgetary targets?

Correct AnswerverifiedShow Answer

Correct Answerverified(a)$3,000...View AnswerShow Answer

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Companies must often tie up large sums o...
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(a)$3,000
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View Answer