Test 3

Participative

A budget that is prepared with the full cooperation of managers at all levels is a self-imposed or___ budget. (Enter only one word per blank.)

Unfavorable Variance

Actual revenue is less than budgeted revenue

Production

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. (Enter only one word per blank.)

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?

The cash budget uses information from several other budgets. Which of the following budgets is NOT used to prepare the cash budget?a. direct labor b. sales c. production d. selling and administrative

c. production

Merchandise Purchases

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.

activity

The difference between a revenue or cost item in the planning budget and the same item in the flexible budget at the actual level of activity is a(n) ___ variance. (Enter only one word per blank.)

Sales

The first step in the budgeting process is preparing the ______ budget.

begins with the preparation of performance reports

The variance analysis cycle ______.

a. production budget b. selling and administrative expense budget

Which of the following budgets are directly based on information from the sales budget?a. Direct labor budgetb. Production budgetc. Selling and administrative expense budgetd. direct materials budget

Budget

A detailed plan for the future that is usually expressed in formal quantitative terms is a(n)____ . (Enter only one word per blank)

Master

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.)

Favorable Variance

Actual revenue is more than budgeted revenue

Master

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

static

An unchanged planning budget is known as a(n) ___ planning budget. (Enter only one word per blank.)

Sales

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. (Enter only one word per blank.)

False

True or false: Control involves developing goals and preparing various budgets to achieve those goals.

flexible

What costs and revenues should have been for the actual level of activity is shown on a (n)___ budget. (Enter only one word per blank.)

net income is higher than expected but all of most expense variances are unfavorable

When comparing the static planning budget to actual activity, a problem that arises when actual activity is higher than budgeted activity is that ______.