accounting

Which of the following is NOT included on a budgeted cash payments budget?

Production in units

The final step in the master budgeting process is to prepare the Blank______.

budgeted balance sheet

Total sales on the sales budget equal budgeted unit sales multiplied by Blank______.

budgeted sales price per unit

Budgets Blank______.

communicate management's plan throughout the organization

The manufacturing overhead budget includes Blank______.

indirect manufacturing costs depreciation on production equipment

Davidson Corporation's master budget shows expected direct labor cost of $90,000 for the month of May. During May, the company's expected sales equal 12,000 units and expected production is 15,000 units. If each unit requires 1/2 hour of direct labor, the budgeted direct labor rate is $ per hour.

Blank 1: 12

Company objectives are translated into financial terms in a(n) .

Blank 1: budget

The operating budgets feed directly into the , which then feeds directly into the budgeted balance sheet.

Blank 1: cash Blank 2: budget

Another budget period is automatically added to the budget as one period passes when using a(n) or rolling budget.

Blank 1: continuous or perpetual

The cash budget is one of the primary budgets that is prepared.

Blank 1: financial

A pro forma budgeted balance sheet is developed from the budgets.

Blank 1: financial or previous

A company's planned profit is shown on the budgeted .

Blank 1: income Blank 2: statement

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

Blank 1: manufacturing or factory Blank 2: overhead

A comprehensive set of budgets that covers all phases of planned activities for a specific period is called the budget.

Blank 1: master

Each component of a(n) budget is based on or provides input for another component.

Blank 1: master

The amount of goods for resale to be purchased from suppliers during the period is shown on the budget.

Blank 1: merchandise or merchandising Blank 2: purchases or purchasing

The sales, production, and purchases budgets are all budgets.

Blank 1: operating or operational

Setting goals and objectives for the future is done during the phase.

Blank 1: planning

Developing goals for the budget is part of , whereas involves determining if goals have been followed.

Blank 1: planning Blank 2: controlling or control

Budgeting is an important part of the and cycle.

Blank 1: planning or plan Blank 2: control or controlling

The direct materials purchases, direct labor, and manufacturing overhead budgets are all based on the budget.

Blank 1: production

The number of units that must be made to satisfy sales needs and to provide for the desired ending inventory is shown on the budget. (Enter only one word per blank.)

Blank 1: production

The first step in the process of preparing the master budget is the budget or forecast.

Blank 1: sales

The production budget is based upon the budget.

Blank 1: sales

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

Blank 1: selling, sales, or marketing Blank 2: administrative or admin

When a manager creates a budget that understates expected revenues or overstates expected expenses, budgetary occurs.

Blank 1: slack

The starting point of the planning process is management's plan or vision for the organization.

Blank 1: strategic

When management sets the budget and imposes it on employees throughout the organization, a - approach is being followed.

Blank 1: top Blank 2: down

Which of the following budgets shows the company's planned profit?

Budgeted income statement

What number does the raw materials budget take directly from the production budget?

Budgeted production

Which of the following sections are included in the cash budget?

Collections Financing

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

Direct labor budget Direct materials budget Manufacturing overhead budget

True or false: Controlling involves developing goals and preparing various budgets to achieve those goals.

False

True or false: The sales budget is based on the production budget.

False

True or false: Using a participative approach to budgeting is less likely to motivate employees than using a top-down approach.

False

Which of the following budgeting most likely allows employees throughout an organization to have input into the budget-setting process?

Participative budgeting

Which of the following is needed to prepare a sales budget?

The budgeted number of units to be sold

Budgets that are most likely to motivate employees Blank______.

are tight but attainable

Managers must try to find the "just-right" level of difficulty in setting budgetary goals so they Blank______.

have motivating effects on employee behavior

A continuous or rolling budget Blank______.

helps avoid games at the end of a budget period keeps managers in continuous planning mode adds one period to the end of the budget as each period comes to a close

Financial budgets Blank______.

impact the budgeted balance sheet include the capital expenditures budget include the cash budget

Managers put plans into action as part of Blank______.

implementing

The calculation of unit product cost requires information from the Blank______ budget.

manufacturing overhead

The amount of goods to be purchased from suppliers during the period is shown on the Blank______ budget.

merchandise purchases

To calculate the direct labor requirement for each quarter, Blank______.

multiply the number of direct labor hours required per unit times the number of units to be produced

The pro-forma income statement is based on the combined Blank______ budgets.

operating

A continuous or budget keeps managers focused at least one year ahead.

perpetual

Budgets are used for two distinct purposes: ______ and ______. The first of these purposes relates to developing goals and preparing various budgets, while the second involves comparing actual results to the budget.

planning; controlling

The direct materials budget directly relies on the Blank______ budget.

production

The number of units needed to satisfy sales and provide the desired ending inventory is shown on the Blank______ budget.

production

Advantages of budgeting include Blank______.

providing benchmarks for evaluating performance providing lead time to solve potential problems promoting cooperation and coordination among different areas within the organization forcing managers to think about and plan for the future

When creating the master budget, the Blank______ budget is prepared first

sales

All of these rely on the the production budget except for the Blank______ budget.

selling and administrative

Budgeted expenses for costs related to selling the product and managing the business are shown on the Blank______ budget.

selling and administrative

Planning starts with managers' Blank______.

strategic plan

When an organization uses a top-down approach to budgeting, ______.

the budget is imposed on lower levels of the organization top management sets the budget

Pastoria Enterprises has scheduled raw material purchases of $100,000 in January, $130,000 in February, and $150,000 in March. The company pays for 75% of its purchases in the month of purchase and 25% the month after the purchase. Calculate the expected cash disbursements for the month of February.

$122,500

Madison Corporation's expected beginning cash balance is $35,000. Cash collections are budgeted at $50,000 and cash disbursements are estimated to be $80,000. The minimum required cash balance is $20,000 and the company can borrow as much as needed in increments of $10,000. Calculate the expected ending cash balance for the month.

$25,000

To calculate the cash balance before financing on the cash budget, add the Blank______.

beginning cash balance to the budgeted cash receipts and deduct budgeted cash payments

A detailed document that identifies resources and expenditures that will be required over a limited time (typically a year) is a(n) Blank______.

budget

Collections on credit sales made to customers in prior period(s) plus collections on sales made in the current budget period equal ______.

cash receipts

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

too easy to attain