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The budget process involves doing all the following except |
dismissing all managers who fail to achieve operational goals specified in the budget |
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The benefits of comparing actual performance of the operations against planned goals include all the following except |
determining how managers are performing against prior years’ actual operating results |
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Budgeting supports the planning process by encouraging all of the following activities except |
directing and coordinating operations during the period |
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The budgeting process does not involve which of the following activities? |
Increase in sales by increasing marketing efforts |
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Which of the following budgets allow fore adjustments in activity levels? |
Flexible budget |
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The process of developing budget estimates by requiring all levels of management to estimate sales, production, and other operating data as though operations were being initiated for the first time is referred to as |
Zero-based budgeting |
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A variant of fiscal-year budgeting whereby a twelve-month projection into the future is maintained at all times is termed |
Continuous budgeting |
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Miller and Sons’ static budget for 10,000 units of production includes $50,000 for direct materials, $44,000 for direct labor, variable utilities of $5,000, and supervisor salaries of $24,000. A flexible budget for 12,000 units of production would show |
Direct materials of $60,000, direct labor of $52,800, utilities of $6,000, and supervisor salaries of $24,000 |
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A disadvantage of static budgets is that they |
Do not show possible changes in underlying activity levels |
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Chelsa Manufacturing Co.’s static budget at 5,000 units of production includes $40,000 for direct labor and $5,000 for variable electric power. Total fixed costs are $23,000. At 8,000 units of production, a flexible budget would show |
Variable costs of $72,000 and $23,000 of fixed costs |
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If budgeted beginning inventory is $8,000, budgeted ending inventory is $9,400, and budgeted cost of goods sold is $10,260, budgeted production should be |
$11,660 |
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At the beginning of the period, the Assembly Department budgeted direct labor of $110,000, direct materials of $170,000, and fixed factory overhead of $28,000 for 8,000 hours of production. The department actually completed 10,000 hours of production. What is the appropriate total budget for the department, assuming it uses flexible budgeting? |
$378,000 |
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The production budgets are used to prepare which of the following budgets? |
Direct materials purchases, direct labor cost and factory overhead cost |
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Principal components of a master budget include |
Sales budget, production budget and capital expenditures budget |
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Motorcycle Manufacturers, Inc. projected sales of 78,000 machines for the year. The estimated January 1 inventory is 6,500 units, and the desired December 31 inventory is 6,000 units. What is the budgeted production (in units) for the year? |
77,500 |
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The operating budgets of a company includes the |
Production budget |
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Which of the following budgets is not directly associated with the production budget? |
Capital expenditures budget |
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Which of the following budgets provided the starting point for the preparation of the direct labor cost budget? |
Production budget |
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An October sales forecast projects 7,000 units are going to be sold at a price of $11.50 per unit. The desired ending iventory in units is 15% higher than the beginning inventory of 1,000 units. Total October sales are anticipated to be |
$80,500 |
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The budgeted finished goods inventory and cost of goods sold for a manufacturing company for the year are as follows: January 1 finished goods, $765,000; December 31 finished goods, $540,000; and cost of goods sold for the year, $2,560,000. The budgeted costs of goods manufactured for the year is |
$2,335,000 |
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Woodpecker Co. has $296,000 in accounts receivable on January 1. Budgeted sales for January are $860,000. Woodpecker Co. expects to sell 20% of its merchandise for cash. Of the remaining 80% of sales on account, 75% are expected to be collected in the month of sale and the remainder the following month. The January cash collections from sales are |
$984,000 |
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The budget that summarizes future plans for the acquisition of fixed assets is |
Capital expenditures budget |
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Estimated cash payments are planned reductions in cash from all of the following except |
Notes and account receivable |
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Nuthatch Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business are $260,000, $375,000, and $400,000, respectively, for September, October, and November. The company expects to sell 30% of its merchandise for cash. Of sales on account, 80% are expected to be collected in the month of the sale and 20% in the month following the sale. The cash collections expected in September from accounts receivable are estimated to be |
$145,600 |
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Southern Company is preparing a cash budget for April. The company has $12,000 cash at the beginning of April and anticipates $30,000 in cash receipts and $34,500 in cash disbursements during April. Southern Company has an agreement with its bank to maintain a minimum cash balance of $10,000. To maintain the required balance during April, the company must |
borrow $2,500 |
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