Accounting Chapter 8 Homework

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

sales price per unit

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

self-imposed

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

selling and administrative

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

If a budget initiated by top management has targets that are set too high, ____

Motivation will suffer

What is subtracted from total budgeted selling and administrative expenses to determine the cash disbursements for selling and administrative expenses?

Non-cash expenses

Operating budget generally cover a ______ period

One-year

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

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 ____ process

Planning

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.

Production

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

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 the preparation of the budget

Sales

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

Self-imposed

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

Selling and administrative

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

The budgeted number of units to be sold

Highly achievable budget targets _____

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

Which of the following budgets are directly based on information from the sales budget?

-Selling and administrative expense budget -Production budget

Master budget schedules ______.

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

Limitations of self-imposed budgeting include

-budgetary slack -suboptimal budget recommendations

Budgets ______

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

When profit targets are set by top managers, _____

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

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

A budget

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

Budget

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

Budgetary slack

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

Cash deficiency

Budgets _____

Communicate managements plan throughout the organization

A 12-month budget that rolls forward one month (or quarter) as the current month (or quarter) is completed is called a(n) ____ or perpetual budget

Continuous

True or false: Challenging but highly achievable budgets increase the likelihood that lower-level managers will engage in undesirable behavior to secure their desired compensation

False

What is added to the variable selling and administrative expenses to get the total selling and administrative expenses?

Fixed selling and administrative expenses

The cash budget ______.

is prepared near the end of the master budget process