ACC 208 - Chapter 9 LS

The purpose of a(n) _____ is to assist in establishing goals, measure operating results and isolate areas that need attention.

Budget

Budgetary slack occurs when a manager submits a budget that is...

Too easy to attain

In companies that do not use a self-imposed budgeting process, profit targets are generally set by...

Top managers

T/F: A manager is not necessarily penalized if actual results do not measure up to the budgeted goals.

True

All costs of production other than direct materials and direct labor are shown on the _____ budget.

Manufacturing overhead

In a manufacturing company, which budget is used at the basis for creating the direct materials budget, the direct labor budget, and the manufacturing overhead budget?

Production budget

Budgets...

-Define goals and objectives that can serve as benchmarks for evaluating subsequent performance -The budgeting process can uncover potential bottlenecks before they occur -Force managers to think about and plan for the future -Coordinate the activities of the entire organization by integrating the plans of its various parts

Which of the following budgets are needed to calculate unit product costs?

-Direct labor budget -Direct materials budget -Manufacturing overhead budget

Imposing expectations from top management and then penalizing employees who do not meet those exceptions will generate resentment; _____ will help with this problem

A self-imposed budget

Required borrowings on a cash budget is calculated by...

Adding the desired ending cash balance to the amount of the cash delivery

If actual results do not measure up to budgeted goals, a manager should...

Attempt to correct any unfavorable discrepancies

The receipts, disbursements, excess or deficiency, and financing section are all parts of the...

Cash budget

A 12-month budget that rolls forward one month (or quarter) as the current month (or quarter) is completed is called a(n) _____ or perpetual budget.

Continuous

The ending finished goods inventory budget computes the...

Cost of unsold units

The most common significant noncash manufacturing overhead costs in most companies is _____.

Depreciation

The number of working hours required to satisfy the production budget is shown on the _____ _____ budget.

Direct labor

The cost of unsold units is computed on the _____ budget.

Ending finished goods inventory

The beginning raw materials inventory for the year is the same as the beginning raw materials for which quarter?

First

Using a budget to blame or pressure employees to do a better job leads to...

Mistrust

Facing labor shortages or having to hire or lay off workers at awkward times are consequences of...

Neglecting to budget the amount of labor time that will be needed

Operating budgets generally cover a _____ period.

One year

A budget that is prepared with the full cooperation of managers at all levels is a self-imposed or _____ budget.

Participation

Which of the following is used in the cash disbursements schedule?

Payments for raw materials

The first line of the direct labor budget consists of the budgeted units expected to be _____ during the period.

Produced

In a manufacturing company, the _____ budget shows the number of units that must be manufactured to satisfy sales needs and provide for the desired ending inventory.

Production

Which of the following holds managers accountable for revenues and costs?

Responsibility accounting

A detailed schedule showing the expected sales for the budget period is presented on the _____ budget.

Sales

The budget that shows the budgeted expenses for areas other than manufacturing is the _____ and _____ expense budget.

Selling and administrative

Highly achievable budget targets...

-May help build manager confidence -May generate greater management commitment to the budget -Are used in most companies

Which of the following is needed to calculate raw materials to be purchased on the direct materials budget?

-Raw materials required per unit -Beginning inventory of raw materials

In a manufacturing company, the _____ _____ budget details the raw materials that must be purchased to fulfill the production budget and to provide for adequate inventories.

Direct materials