ACTG213 Midterm 2

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

Labor shortages, erratic layoffs, low employee morale.

What number does the direct materials budget take directly from the production budget?

Required production

What is needed to prepare a sales budget?

The budgeted number of units to be sold.

In a manufacturing company, the ___ budget is used to determine the budgets for manufacturing costs, including the direct materials budget, the direct labor budget and the manufacturing overhead budget.

production

A merchandise purchasing budgeting is usually accompanied by a...

schedule of expected cash disbursements.

In companies that do not use a self-imposing budgeting process, profit targets are generally set by...

top managers

When profit targets are set by top managers,

waste may occur, goals may be unrealistically high, too much slack may be allowed.

What is needed to calculate raw materials to be purchased on the direct materials budget?

Beginning inventories of raw materials and raw materials required per unit.

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

beginning

When preparing a manufacturing overhead budget, the total budgeted cost must be adjusted for ___ expense to determine cash disbursements for overhead.

depreciation

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

The cash budget...

is prepared near the end of the master budget.

All costs of production other than direct materials and direct labor are shown on the _____ _____ budget:

manufacturing overhead

T/F: Many companies divide their budget year into twelve months in order to require periodic review and reappraisal of budget data throughout the year.

False