A306 Chapter 8
Facing labor shortages or having to hire or lay off workers at awkward times are consequences of Blank______. Multiple choice question. companies having a small human resources department a decrease in sales neglecting to budget the amount of labor time that will be needed excess beginning inventory
neglecting to budget the amount of labor time that will be needed
The direct materials budget directly relies on the Blank______ budget. Multiple choice question. sales production direct labor merchandise purchases
production
Because all other parts of the budget depend on it, if the Blank______ budget is inaccurate, the rest of the budget will be inaccurate. Multiple choice question. production cash direct materials sales
sales
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 Blank______ budget. Multiple choice question. sales cash production direct materials
sales
To calculate total sales on the sales budget, multiply budgeted sales in units by Blank______. Multiple choice question. number of units sales price per unit budgeted unit sales
sales price per unit
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 ___
first, last
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
he cash budget Blank______. Multiple choice question. uses information from the budgeted balance sheet and income statement is the first budget prepared in the master budget process is prepared near the end of the master budget process
is prepared near the end of the master budget process
Using budgeting assumptions when preparing the master budget, Blank______. Multiple choice question. makes it easier to answer "what-if" questions increases the complexity of the process involves adjusting data inputs within each master budget schedule
makes it easier to answer "what-if" questions
All costs of production other than direct materials and direct labor are shown on the Blank______ budget. Multiple choice question. merchandise purchases manufacturing overhead cash ending finished goods inventory
manufacturing overhead
The calculation of unit product cost requires information from the Blank______ budget Multiple choice question. selling and administrative manufacturing overhead cash ending finished goods inventory
manufacturing overhead
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 Blank______ budget.
master
The first line of the direct labor budget consists of the budgeted units expected to be Blank______ during the period. Multiple choice question. produced sold
produced
In a manufacturing company, the Blank______ budget shows the number of units that must be manufactured to satisfy sales needs and provide for the desired ending inventory. Multiple choice question. direct materials sales cash production
production
In a manufacturing company, the __________ budget is prepared right after the sales budget.
production
The budgeted income statement does NOT rely on information from the Blank______ budget. Multiple choice question. ending finished goods inventory sales selling and administrative expense production
production
The direct labor budget is based directly on the Blank______ budget. Multiple choice question. sales manufacturing overhead raw materials production
production
Required borrowings on a cash budget is calculated by Blank______. Multiple choice question. adding the desired ending cash balance to the amount of the cash deficiency subtracting the desired ending cash balance from the amount of cash excess adding the desired ending cash balance to the amount of cash excess subtracting the beginning cash balance from the amount of the cash deficiency
adding the desired ending cash balance to the amount of the cash deficiency
The receipts section of the cash budget lists Blank______. Multiple choice question. total sales for the period total credit sales all cash inflows all cash inflows, except from financing
all cash inflows, except from financing
Because it is needed for the schedule of expected cash collections, the annual master budget file includes the ______________________
balance sheet
The annual master budget file includes the Blank______ from last year because it is needed for the schedule of expected cash collections. Multiple choice question. cash budget sales budget balance sheet income statement
balance sheet
Developing goals and preparing various budgets to achieve those goals is part of Blank______,
planning
Budgets are used for two distinct purposes: Blank______ and Blank______. Multiple choice question. advising; consulting planning; control benchmarking; integrating executing; overseeing
planning; control
Budgeted expenses for areas other than manufacturing are shown on the Blank______ budget. Multiple choice question. cash manufacturing overhead ending finished goods inventory selling and administrative
selling and administrative
In large organizations, many smaller individual budgets submitted by department heads and other responsible people comprise the Blank______ budget. Multiple choice question. manufacturing overhead selling and administrative cash ending finished goods inventory
selling and administrative
budget
a detailed plan for the future that is usually expressed in formal quantitative terms
To prepare a budgeted balance sheet as of December 31, 2023, data is needed from the Blank______ December 31, 2022. Multiple choice question. statement of cash flows for the year ended balance sheet as of income statement for the year ended
balance sheet as of
The cash budget uses information from several other budgets. Which of the following budgets is NOT used to prepare the cash budget? Multiple choice question. Direct labor Selling and administrative Sales Production
Production
Master budget schedules Blank______. Multiple select question. answer several key questions for a company may be prepared in any order are based on estimates and assumptions
answer several key questions for a company are based on estimates and assumptions
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? Multiple choice question. Cash Sales Production Finished goods inventory
Production
S&P Enterprises has scheduled direct 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. Multiple choice question. $122,500 $130,000 $135,000 $107,500
$122,500
S&P Enterprises has scheduled direct material purchases of $120,000 in April, $140,000 in May and $160,000 in June. 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 May. Multiple choice question. $125,000 $145,000 $105,000 $135,000
$135,000
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. Multiple choice question. $25,000 $5,000 $20,000
$25,000
Given budgeted sales of 10,000 units, desired ending inventory of 5,000 units, and beginning inventory of 2,000 units, required production is Blank______ units. Multiple choice question. 10,000 7,000 15,000 13,000
13,000 (10,000 + 5,000 - 2,000)
If desired ending inventory is 25% of next month's sales, the number of units to be produced in March is Blank______. Multiple choice question. 16,000 17,000 17,250 21,000
17,000
Which of the following is needed to calculate raw materials to be purchased on the direct materials budget? Multiple select question. Budgeted unit sales Ending finished goods inventory Beginning inventory of raw materials Raw materials required per unit
Beginning inventory of raw materials Raw materials required 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? Multiple choice question. Budgeted income statement Budgeted balance sheet Budgeted selling and administrative expenses Manufacturing overhead budget
Budgeted income statement
Which of the following is not found in the financing section of the cash budget? Multiple choice question. Cash deficiency Interest Borrowings Repayments
Cash deficiency
What number does the direct materials budget take directly from the production budget? Multiple choice question. Required production Beginning raw materials inventory Budgeted sales Ending inventory of finished goods
Required production
What is usually the major source of receipts in the receipts section of the cash budget? Multiple choice question. Gains Insurance proceeds Sales Interest received
Sales
Which of the following budgets are directly based on information from the sales budget? Multiple select question. Selling and administrative expense budget Direct materials budget Direct labor budget Production budget
Selling and administrative expense budget Production budget
A budgeted balance sheet is developed using data from the Blank______ of the budget period and data contained in the various schedules. Multiple choice question. end average beginning
beginning
The final schedule of the master budget is the Blank______. Multiple choice question. budgeted income statement cash budget budgeted balance sheet sales budget
budgeted balance sheet
budgets
communicate management's plan throughout the organization
When creating an Excel budget and performing what-if analysis, it is generally easiest to Blank______. Multiple choice question. create the budget with a budgeting assumption tab adjust data inputs within each master budget schedule copy the master budget and make change to the copy only
create the budget with a budgeting assumption tab
Budgets Blank______. Multiple select question. define 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 and the budgeting process can uncover potential bottlenecks before they occur provide each department with the same amount of money to spend, so that all departments are treated fairly force managers to think about and plan for the future
define 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 and the budgeting process can uncover potential bottlenecks before they occur force managers to think about and plan for the future (Money allocated, not all same)
Working hours required to satisfy the production budget are shown on the Blank______ budget. Multiple choice question. direct labor merchandise purchases cash direct materials
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 Blank______ budget details the raw materials that must be purchased to fulfill the production budget and provide for adequate inventories Multiple choice question. sales direct materials merchandise purchases production
direct materials
The cost of unsold units is computed on the Blank______ budget. Multiple choice question. production ending finished goods inventory sales manufacturing overhead
ending finished goods inventory
Risks of not knowing in advance how much labor time will be needed throughout the budget period includes Blank______. Multiple select question. erratic layoffs low employee morale excessive inventory levels labor shortages
erratic layoffs low employee morale labor shortages
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. True false question.
false (not always equal)
Borrowing money is required whenever Blank______. Multiple select question. the cash excess is less than the minimum required cash balance the cash excess is greater than the minimum required cash balance there is a cash deficiency the cash excess equals the minimum required cash balance
there is a cash deficiency the cash excess is less than the minimum required cash balance
The ending finished goods inventory budget computes the cost of Blank______ units. Multiple choice question. sold unsold
unsold
On the cash budget, what is subtracted from total cash available to find the cash excess or deficiency? Multiple choice question. Cash inflows Cash disbursements Noncash items Selling and administrative expenses
Cash disbursements
Which of the following budgets are needed to calculate unit product costs? Multiple select question. Selling and administrative Direct labor Cash Direct materials Manufacturing overhead
Direct labor Direct materials Manufacturing overhead
Which of the following budgets are needed to calculate unit product costs? Multiple select question. Manufacturing overhead Selling and administrative Cash Direct materials Direct labor
Direct materials Direct labor Manufacturing overhead
Which of the following is needed to prepare a sales budget? Multiple choice question. Desired ending inventory The budgeted number of units to be sold Desired ending inventory of raw materials Beginning inventory of finished goods
The budgeted number of units to be sold
Many of the schedules in a master budget are based on a variety of management estimates and assumptions. True false question
True