Acct Exam 3
This variance is found by comparing actual results and the master budget A. Spending Variance B. Husker budget Variance C. Master budget Variance D. Volume Variance
C
Budgetary Slack
Managers who intentionally understate expected sales or overstate expected expenses are creating
Budgeted Balance Sheet
Provides information about a company's expected financial position at a specific point in time
Budgeted Income Statement
Provides information about a company's expected revenue, expenses, and profitability for a period of time
Participative
Approach to budgeting is more likely to motivate people to work towards an organizational goal
An example of a favorable variance is: A) Material prices are higher than budgeted. B) Actual expenses are less than budgeted. C) Budgeted direct labor costs are less than actual costs. D) Actual sales are less than budgeted.
B
Collections of cash from sales appear on what budget? A) Sales budget B) Combined Cash budget C) Budgeted income statement D) None of the above answers is correct.
B
Which of the following may cause a favorable volume variance A. Actual sales are greater than master budget sales B. Flexible budget sales are greater than master budget sales C. Actual sales are greater than flexible budget sales D. All answers are correct
B
Master Budget
Set of interrelated budget that constitutes a plan of action for a specific period
The ________ budget starts with the number of units to be produced. A) production B) operating expense C) direct labor D) All of these choices start with the number of units to be produced.
C
Rolling Budget
When one budget period passes, another is automatically added at the end
Order of Preparation *Need to Memorize*
1. Sales Budget 2. Production Budget 3. DM purchases budget 4. DL Budget 5. Manufacturing Overhead Budget 6. Budgeted cost of goods sold 7. Selling and administrative expense budget 8. Budgeted income statement 9. Cash Budget 10. Budgeted Balance Sheet
On the direct materials budget, the total quantity of direct materials to be purchased is computed as A) quantity needed for production + desired end inventory of DM - beginning inventory of DM. B) units to be produced + desired end inventory of DM - beginning inventory of DM. C) units to be produced - desired end inventory of DM + beginning inventory of DM. D) quantity needed for production - desired end inventory of DM + beginning inventory DM.
A
This variance is found by comparing actual results and the flexible budget A. Spending variance B. Husker budget variance C. Master budget Variance D. Volume variance
A
Budget sales unit 75, actual sales unit 72, budget selling price $1.20, actual selling $1.40 A. $3.60 U volume variance for sales B. 3.60 F volume variance for sales C. $14.40 F volume variance for sales D. $10.80 F volume variance for sales
A Master= 75x 1.20= 90 Flex= 72x 1.2=86.4 Flex-Master =-3.60 Therefore Unfavorable
Budgeted sales units = 3500, var. cost/ unit=$2, FC=$4000. Actual sales volume= 3700 & FC=$3000 A. Flex budget total Exp.=$11,400 B. Flex budget total exp. =$11,000 C. Flex budget total exp. =$10,400 D. Flex budget total exp. =$10,000
A -> (3,700x $2) + 4,000
Control Function
Comparing actual results to budget plans
"The comprehensive budget" is best described by which of the following terms? A) Operating budget B) Sensitivity analysis C) Responsibility center D) Master budget
D
. Which of the following is a benefit to an organization that implements a budget? A) Budgets help managers focus their attention on the future needs in an organization. B) Budgets help managers improve their decision-making processes in an organization. C) Budgets help the manager improve the motivation of employees in the workplace. D) All of the above
D
A company's planned borrowings and repayments appear on the A) capital expenditure budget. B) production budget. C) operating expenses budget. D) combined cash budget.
D
All of the following are needed for the flexible budget expect A. Budgeted selling price B. Actual activity Level C. Budgeted var. cost/ unit and budgeted fixed cost D. Budgeted activity levels
D
The final step in the preparation of the financial budget is the preparation of which of the following? A) Master budget B) Cash budget C) Operating budgets D) Budgeted balance sheet
D
The following variance combinations are correct: A. DM Price and efficiency variances= Master budget variance B. DM Price and quantity variance= Volume variance C. DL Rate and efficiency variance= Master budget variance D. DL Rate and efficiency variance= Spending variance
D
Which of the following budgets usually shows separate sections for fixed and variable costs? A) Direct materials and manufacturing overhead budget B) Manufacturing overhead budget and production budget C) Production budget and manufacturing overhead budget D) Operating expenses budget and manufacturing overhead budget
D
Units to be produced 400, 15 minute DL/unit, DL rate $10, VOH rate $9/DL hr, FOH $200, OH budget A. 1,000 B. 900 C. 4,000 D. 1,100
D 400x (15/60)x 9+200
Operating Budget
Establishes goals for the company's sales and production personnel
Production Budget
Has been prepared, the direct materials purchases, DL, and the manufacturing overhead budgets can be prepared
Sales Forecast
The starting point for preparing the master budget
