ACC Ch. 8 Master Budget SB

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

A number of separate, but interdependent, budgets that formally lay out the company's sales, production, and financial goals are contained in the ___ budget. (Enter only one word per blank.)

master

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

participative

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

planning

Budgets are used for two distinct purposes: ______ and ______.

planning; control

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. (Enter only one word per blank.)

production

ABC, Inc.'s expected sales for the first six month of the year are as follows. February $150,000 March $160,000 Experience has shown that 60% of sales are collected in the month of sale and 40% are collected the month after sale. Calculate expected cash collections for the month of March.

$156,000 60% of March sales ($96,000) + 40% of February sales ($60,000) = $156,000

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

the cash excess is greater than the minimum required cash balance

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

unsold

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

Budgets ______.

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

Many of the schedules in a master budget are based on a variety of management estimates and assumptions.

True

Required borrowings on a cash budget is calculated by ______.

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

Master budget schedules ______.

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

Because it is needed for the schedule of expected cash collections, the annual master budget file includes the ___ ___ from last year. (Enter only one word per blank.)

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

Budgets ______.

communicate management's plan throughout the organization

The number of working hours required to satisfy the production budget is shown on the ___ ___ budget. (Enter only one word per blank.)

direct labor

ABC, Inc.'s expected sales for the first six month of the year are as follows. March $160,000 April $200,000 Experience has shown that 60% of sales are collected in the month of sale and 40% are collected the month after sale. Calculate expected cash collections for the month of April.

$184,000 40% of March sales ($64,000) + 60% of April sales ($120,000) = $184,000

Working hours required to satisfy the production budget are 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. (Enter only one word per blank.)

direct material

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

ending finished goods inventory

A company's planned net profit that serves as a benchmark against which subsequent company performance can be measured is shown on the budgeted ___ ___ . (Enter only one word per blank.)

income statement

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. (Enter only one word per blank.)

manufacturing overhead

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

master

The amount of goods for resale to be acquired from suppliers during the period is shown on the ___ ___ budget. (Enter only one word per blank.)

merchandise purchases

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

merchandise purchases

A manager cannot complain that the budget was unrealistic and impossible to meet when a(n) ___ - ___ budget is in place. (Enter only one word per blank)

self imposed

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

To prepare a budgeted balance sheet as of December 31, 2021, data is needed from the ______ December 31, 2020.

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

create the budget with a budgeting assumption tab

Borrowing money is required whenever ______.

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