Chapter 8 SB ACC 102

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

Manufacturing overhead

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

balance sheet

The annual master budget file includes the ______ from last year because it is needed for the schedule of expected cash collections.

balance sheet

To prepare a budgeted balance sheet as of December 31, 2020, data is needed from the ______ December 31, 2019.

balance sheet as of

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

beginning

When a manager creates a budget that is too easy to attain, __________ occurs.

budgetary slack

Limitations of self-imposed budgeting include:

budgetary slack and suboptimal budget recommendations

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

budgets

Which of the following is not found in the financing section of the cash budget?

cahs deficiency

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

create the budget with a budgeting assumption tab

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

direct labor

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

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

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. (Enter only one word per blank.)

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

(TRUE OR FALSE) The amounts under the Year column in the cash budget always equal the sum of the amounts for the months or quarters of the budget.

false

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

may still have a cash deficiency issues during the year.

The amount of goods for resale to be acquired from suppliers during the period is shown on the _________ __________budget.

merchandise purchases

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

merchandise purchases

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

participative

More accurate estimates and higher motivation are generally the result of using a(n) _______ budget

participative

Budgets are used for two distinct purposes:

planning and control

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 budgets for manufacturing costs, including the direct materials budget, the direct labor budget, and the manufacturing overhead budget are all based on the_________ budget.

production

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

The cash budget uses information from several other budgets. Which of the following budgets is NOT used to prepare the cash budget?

production

The direct labor budget is based directly on the ______ budget.

production

The direct materials budget directly relies on the __________ budget.

production

A company can consider making investments or repay outstanding principal and interest when ______.

the cash excess is greater than the minimum required cash balance

Borrowing money is required whenever ______.

the cash excess is less than the minimum required cash balance and when there is a cash deficiency

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

top managers

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

unsold

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

Budget

(TRUE OR FALSE) Many of the schedules in a master budget are based on a variety of management estimates and assumptions.

True

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

a budget

The receipts section of the cash budget lists ______.

all cash inflows, except from financing

Master budget schedules ______.

are based on estimates and assumptions and answer several key questions for a company

When profit targets are set by top managers....

goals may be unrealistically high and too much slack may be allowed

Many managers believe that being empowered to create their own self-______________ budgets is the most effective method of budget preparation.

imposed

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

income statement

The cash budget ______.

is prepared near the end of the master budget process.

Using budgeting assumptions when preparing the master budget, ______.

makes it easier to answer "what-if" questions

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

manufacturing overhead

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

required production

Both the production and selling and administrative expense budgets are prepared using information directly from the ____________ budget.

sales

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

sales

The first step in the budgeting process is the preparation of the ___________ budget.

sales

What is usually the major source of receipts in the receipts section of the cash budget?

sales

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

sales price per unit

Which of the following budgets shows the company's planned profit and serves as a benchmark against which subsequent company performance can be measured? -manufacturing overhead budget -budgeted balance sheet -budgeted selling and administrative expenses - budgeted income statement

- budgeted income statement

Which of the following budgets are directly based on information from the sales budget? -direct labor budget -selling and administrative expense budget -production budget -direct materials budget

-selling and administrative expense budget -production budget

Which of the following is needed to prepare a sales budget? -desired ending inventory -desired ending inventory of raw materials -the budgeted number of units to be sold -beginning inventory of finished goods

-the budgeted number of units to be sold

If a cash budget is prepared by quarter, the beginning cash balance for the year is the same as the beginning cash balance for the _______ quarter and the ending cash balance for the year is the same as the ending cash for the _________ quarter.

1st; 4th

What do budgets do?

communicate management's plan throughout the organization

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

direct labor

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

master

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

master

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

planning

In a manufacturing company, the _____________ budget is prepared right after the sales budget.

production

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

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

Budgeted expenses for areas other than manufacturing are shown on the ______ budget.

selling and administrative

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

selling and administrative