ACC 208 CH 6 and 8 Smartbook problems

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

master

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

merchandise purchases

to maximize total contribution margin when a constraint resource exists, produce the products with the ______.

highest contribution margin per unit of the constrained resource

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

required production.

when considering decision alternatives, both relevant and irrelevant costs are included when using the _____ cost approach.

total

potential advantages of dropping a product line or other segment include ____. (select all that apply) a) an overall increase in net operating income b) an overall decrease in other product line sales c) avoiding more fixed costs than the company loses in contribution margin d) increasing relevant costs that the company incurs

a) an overall increase in net operating income c) avoiding more fixed costs than the company loses in contribution margin

Master budget schedules ______. (select all that apply) a) answer several key questions for a company b) are based on estimates and assumptions c) may be prepared in any order

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

A company must make a volume trade-off decision when they_____ (select all that apply) a) do not have enough capacity to satisfy all product demand b) have excess capacity that is not currently being utilized c) must trade off units of one product for units of another

a) do not have enough capacity to satisfy all product demand c) must trade off units of one product for units of another

budgets _____ (select all that apply) a) force managers to think about and plan for the future b) and the budgeting process can uncover potential bottlenecks before they occur c) coordinate the activities of the entire organization by integrating the plans of its various parts d) provide each department with the same amount of money to spend, so that all departments are treated fairly e) define goals and objectives that can serve as benchmarks for evaluating subsequent performance

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

which of the following are directly based on information from the sales budget? (select all that apply) a) selling and administrative expense b) direct materials c) production d) manufacturing overhead

a) selling and administrative expense c) production

A company is considering buying a component part that they currently make using some existing equipment. Relevant costs to this sourcing decision include_____(select all that apply) a) variable overhead b) allocated general overhead c) equipment depreciation charges d) outside purchase price

a) variable overhead d) outside purchase price

when considering accepting a special order, _____. (Select all that apply) a) incremental revenue should be equal to incremental cost b) there must be idle capacity c) opportunity costs should never be considered d) normal sales must not be affected

b) there must be idle capacity d) normal sales must not be affected

the machine or process that is limiting overall output is called

bottleneck

the step that limits total output because it has the smallest capacity is called a constraint or ______.

bottleneck

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

cash deficiency

On the cash budget, what is subtracted from total cash available to find the cash excess or deficiency?

cash disbursement

A limited resource of some type that restricts the company's ability to satisfy demand is a _____.

constraint.

a business segment should only be dropped if a company can avoid more in fixed costs than it gives up in _____.

contribution margin

The number of working hours required to satisfy the production budget is 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.

direct material

a merchandising company prepares a merchandise purchasing budget instead of a ______ budget.

production

in a manufacturing company, the _____ budget is prepared right after the sales budget.

production

the direct materials budget directly relies on the _____ budget.

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?

production budget

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

sales

a one-time sale that is not considered part of the company's normal ongoing business is referred to as a _____ ______ decision.

special order

When a constraint exists, companies need to focus on maximizing ______.

total contribution margin

when demand for products exceeds the production capacity, a _____ decision must be made.

volume trade-off

A special order should be accepted ______.

when the incremental revenue from the special order exceeds the incremental costs of the order

When a resource, such as space in the factory, has no alternative use, its opportunity cost is ______.

zero

Product ABC has a contribution margin per unit of $10.00. Each unit of ABC requires 5 minutes of machine time. Product XYZ has a contribution margin per unit of $15.00 and each unit requires 10 minutes of machine time. If the company's constraint is machine hours, to maximize profit, they should first fill the demand for Product ______.

ABC

operating budgets generally cover a _____ period.

one-year

Developing goals and preparing various budgets to achieve those goals is part of the _____ process.

planning

a merchandising company prepares a merchandise purchasing budget instead of a _____ budget.

production