Managerial Accounting Ch 8

Which budgets are directly based on information from the sales budgets

-production budget -selling and admin

Borrowing money is required whenever

-the cash excess is less likely than the minimum cash balance -there is a cash deficiency

When profit targets are set up by managers,

-waste may occur -goals too high -too much slack may be allowed

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

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, 2017, data is needed from the ______

balance sheet as of Dec 31, 206

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

beginning

A budgeted 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

budget

A 12 month budget that rolls forward one month as the current month is completed is called a

continuous

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

control

The ending finished goods inventory budget computes

cost of unsold units

A significant non cash manufacturing overhead cost for many copies is

depreciation

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

direct labor budget

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

direct materials

More accurate estimates and higher motivation are generally the result of using a ______

participative

The direct materials budget directly relies on the __

production budget

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

Budgets communicate

managements plan through organization

All cost of production other than direct materials and direct labor are shown on the

manufacturing overhead budget

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

master budget

Highly achievable budget targets

may generaate greater management commitment to the budget -are used in most companies -may help build manager confidence

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

planning

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

planning

Both the production and selling and administrative expense budgets are prepared using information directly from the ____ budget:

sales

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

sales price per units

A merchandise purchasing budgeting is usually accompanied by a

schedule of expected cash disbursements

A manager cannot complain that the budget was unrealistic and impossible to meet when ______ _______ budget is in place

self imposed

In large organizations, many smaller individual budgets sumbitted by department heads and other responsible people compromise

selling and admin budget

Variable selling and admin are calculated by multipied the budgeted units ____ by the variable selling and admin expense per unit

sold

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

-beginning inventory of raw materials -raw materials required per unit

Limitations of self imposed budgeting include

-budgetary slack -sub optimal budget recommendations

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

Sales

Operating budgets generally cover a _____ period

one year

A budgeting income statement does NOT rely on information from the ___ budget

production

On the cash budget, what is subtracted from total cash available to find the cash excess or deficiency?

-cash disbursments

Budgets

-coordinate the activities of the entire organization by integrating the plans of its various parts -Define goals and objectives that can serve as future benchmarks for evaluating subsequent perfromance -force managers to plan for the future

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

Production

Company's master budget shows expected sales of 10000 units and expected production of 11000 units for the month of march. Each unit requires 1/2 of direct labor. The direct labor rate is 15.00 per hour. Calculate

Units to be produced X time per unit X rate per hour = 82500

If inventory levels are ____, the result can lead to lost sales or last minute, high cost production efforts

insufficient

Final Schedule of master budget is the ________________________

budgeted balance sheet

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

cash deficiency

When preparing a man OH budget, the total budget cost must be adjusted for _____ expense to determine cash disbursements for oh

depreciation

Whats needed for calculating unit product cost

direct materials -man oh -DL

Payments for direct materials, direct labor, and manufacturing overhead costs are all listed in the ____ section of the cash budget

disbursements

The cost of unsold units is computed on the _____ budget

ending finished goods inventory

Unit product cost is needed to determine cost of goods sold and to value

ending inventory

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

imposed

Risks of not knowing in advance how much labor time will be needed throughout the budget period include

-erratic layoffs -low employee morale -labor shortages

The purpose of a budget should be to

-establish goals -measure operating results -isolate areas needing attention

Company has scheduled direct materials purchases of $100,000 in Jan, $130000 in Feb, and $150000 in March. The company pays for 75% of its purchases in the month of purchase and %25 the month after purchase. Calculate the expected cash disbursements for month of Feb

122500

Given budgeted sales of 10,000 units, desired ending inventory of 5000 units and beginning inventory of 2000 units, required production is _____ units

13000 = 10000//5000 -2000

Davidson Corp'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 15000 units. If each unit requires 1/2 hour of DL. the budged direct labor rate is _______

15000X 75000= 12

If a cash budget is prepared y quarter, the beginning cash balance for the year is the same as the beginning cash balance for _______ quarter and the ending cash balance for the year is the same as the ending cash for ____ quarter

1st, 4th

Madison corporations expected beginning cash balance is 35000. Cash collections are budgeted at 50000 and cash disbursements are estimated to be 80000. The minimum required cash balance is 20000 and the company can borrow as much as needed in increments of 10000. Calculate the expected ending cash balance for the month

35000//50000-80000=5000 25000

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

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

imposed

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

merchandise purchase budget

What number of direct materials budget take directly from the production budget

required production

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

sales

The direct labor budget is based directly on the _____

production budget

Edison corp's variable manufacturing overhead rate is $5 per direct labor hour. Total budgeted fixed overhead is $25000 per month includes $7000 in depreciation expense. Total budgeted direct labor hours for the month of july is 20,000. Based on the month of july, the PDOH rate is

25000//20000 +5 = 6.25