Accounting: Chapter 8 (True/False)

A benefit of self-imposed budgeting is that it may allow lower-level managers to create budgetary slack.

F

A continuous or perpetual budget is a budget that almost never needs to be revised.

F

Both variable and fixed manufacturing overhead costs are included in the selling and administrative expense budget.

F

One disadvantage of a self-imposed budget is that budget estimates prepared by front-line managers are often less accurate and reliable than estimates prepared by top managers.

F

Only variable manufacturing overhead costs are included in the manufacturing overhead budget.

F

The budgeted selling and administrative expense is calculated by multiplying the budgeted unit sales by the selling and administrative expense per unit.

F

The cash budget is typically prepared before the direct materials budget.

F

The direct materials budget is typically prepared before the production budget.

F

The manufacturing overhead budget lists all costs of production other than selling and administrative expenses.

F

The number of units to be produced in a period can be determined by adding the expected sales to the beginning inventory and then deducting the desired ending inventory.

F

A self-imposed budget is a budget that is prepared with the full cooperation and participation of managers at all levels.

T

In companies that do not have "no lay-off" policies, the total direct labor cost for a budget period is computed by multiplying the total direct labor hours needed to make the budgeted output of completed units by the direct labor wage rate.

T

On a cash budget, the total amount of budgeted cash payments for manufacturing overhead should not include any amounts for depreciation on factory equipment.

T

Self-imposed budgets prepared by lower-level managers should be scrutinized by higher levels of management.

T

The sales budget is usually prepared before the production budget.

T

The sales budget often includes a schedule of expected cash collections.

T