Acct 2020 Ch 8

Using budgeting assumptions when preparing the master budget, ______.

makes it easier to answer "what-if" questions

A number of separate, but interdependent, budgets that formally lay out the company's sales, production, and financial goals are contained in the BLANK budget

master

An integrated business plan that formally lays out the company's goals is called the ______ budget.

master

A company with adequate cash balances at the beginning and end of the year, ______.

may still have cash deficiency issues during the year

Developing goals and preparing various budgets to achieve those goals is part of the BLANK process

planning

In a manufacturing company, the BLANK budget is used to determine the budgets for manufacturing costs, including the direct materials budget, the direct labor budget, and the manufacturing overhead budget. (

production

In large organizations, many smaller individual budgets submitted by department heads and other responsible people comprise the ______ budget.

selling and administrative

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

too easy to attain

The ending finished goods inventory budget computes the cost of ______ units.

unsold

Working hours required to satisfy the production budget are shown on the ______ budget.

direct labor

A manager cannot complain that the budget was unrealistic and impossible to meet when a(n) BLANK-BLANK budget is in place

1. Self 2.Imposed

Because it is needed for the schedule of expected cash collections, the annual master budget file includes the BLANK BLANK from last year

1. balance 2. sheet

Budgets ______.

1. define goals and objectives that can serve as benchmarks for evaluating subsequent performance 2. force managers to think about and plan for the future 3. coordinate the activities of the entire organization by integrating the plans of its various parts 3. and the budgeting process can uncover potential bottlenecks before they occur

In a manufacturing company, the BLANK BLANK budget details the raw materials that must be purchased to fulfill the production budget and to

1. direct 2. materials

The cash budget includes four major sections: receipts, disbursements, the cash excess or deficiency, and BLANK

1. financing

A company's planned net profit that serves as a benchmark against which subsequent company performance can be measured is shown on the budgeted

1. income 2. statement

continuous budgeting

A continuous or perpetual budget is a 12-month budget that rolls forward one month (or quarter) as the current month (or quarter) is completed. This budget refers only to a time period and not who was involved in its preparation.

profit planning

A profit planning budget refers to preparing a number of budgets that together form an integrated business plan.

Sales Budget

A sales budget is a detailed budget showing the expected sales for the budget period.

self-imposed

A self-imposed budget is a budget that is prepared with the full cooperation and participation of managers at all levels and could be associated with any type of budget.

Which of the following budgets shows the company's planned profit and serves as a benchmark against which subsequent company performance can be measured?

Budgeted income statement

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

Production

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

The budgeted number of units to be sold

a sales budget

The sales budget is a detailed schedule showing the expected sales for the budgeted period. This budget itself does not relate to one's views being valued by top management. The way a budget is prepared and who is involved would relate to views being valued by top management.

responsibility accounting

The underlying idea behind responsibility accounting is that a manager should be held accountable for only those items the manager can actually control. Responsibility accounting does not include all items like a budget would

True or false: Many of the schedules in a master budget are based on a variety of management estimates and assumptions. True false question.

True

Required borrowings on a cash budget is calculated by ______.

adding the desired ending cash balance to the amount of the cash deficiency

The receipts section of the cash budget lists ______.

all cash inflows, except from financing

A budgeted balance sheet is developed using data from the ______ of the budget period and data contained in the various schedules.

beginning

A detailed plan for the future that is usually expressed in formal quantitative terms is ______.

budget

A detailed plan for the future that is usually expressed in formal quantitative terms is a(n)

budget

Budgets ______.

communicate management's plan throughout the organization

Gathering feedback to ensure that the plan is being followed is referred to as

control

When creating an Excel budget and performing what-if analysis, it is generally easiest to ______.

create the budget with a budgeting assumption tab

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

direct materials

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

ending finished goods inventory

True or false: For most companies a single, annual cash budget is sufficient.

false

Because all other parts of the budget depend on it, if the ______ budget is inaccurate, the rest of the budget will be inaccurate.

sales

The first step in the budgeting process is preparing the ______ budget.

sales

To calculate total sales on the sales budget, multiply budgeted sales in units by ______.

sales price per unit

Recognizing individuals at all levels of the organization as team members whose views and judgments are valued by top management is an advantage of ______.

self-imposed budgeting

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

1. manufacturing 2. overhead

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

1. merchandise 2. purchases

Borrowing money is required whenever ______.

1. the cash excess is less than the minimum required cash balance 2. there is a cash deficiency