Chapter 8 Accy 240

In a manufacturing company, the ________ budget shows the number of units that must be manufactured to satisfy sales needs and provide for the desired ending inventory?

Production

To calculate total sales on the sales budget multiply budgeted sales in units by_______

sales price per unit

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

Sales

The receipts, disbursements, excess or deficeincy and financing section are all parts of the ________?

cash budget

Borrowing money is required when_____

cash defiency cash excess is less than min req cash balance

T/F control involves developing goals and preparing various budgets to acheive those goals ?

false

What is the fist Step to a budget?

first step in the budgeting process is preparing a sales budget Sales budget A detailed schedule showing expected sales expressed in both dollars and units.

The amount of goods for resale to be purchased from suppliers during the period is shown on the ______ budget

merchandise purchasers

If a budget intiated by top management has targets that are set too high_______?

motivation will suffer

FAcing labor shortages or having to hire or layoff workers at awakard times are conseq. of _______

neglecting to budget the amount of labor time that will be needed

Operating budgets generallt cover______

one year period

The master budget

consists of a number of separate but interdependent budgets that formally lay out the company's sales, production, and financial goals. The master budget culminates in a cash budget, a budgeted income statement, and a budgeted balance sheet.

Unit product cost is needed to determine COGS and to value ______

end inv

The End FG inventory budget computes the ______?

cost of unsold units

The number of working hours required to satisfy the production budget is shown on the ________ budget?

DL

In a manufacturing company the __________ budget detials the raw materials that must be purchased to fullfill the production budget and provide for adequate inventories?

DM

A number of seperate but interdependent budgets that formally lay out a companys sales production, and fin goals is contained in the ______

Master budget

The cost of unsold units is computed on the_______

end Fg inv

Budget slack occurs when a a manager submits a budget that is ________

to easy to attain

When a manager creates a budget that is too easy to attain ______ occyrs

budgetary slack

Many managers belive that being empowerd to create their own_______ budgets is the most effective method of budget prep?

self Imposed

In large organizations, many smaller individual budgets submitted by department heads and other responsible people comprise the _______?

selling and admisnitstrauve

variable selling and administrative costs are calculated by multiplying the budgeted untis _____________ by the var selling and admin expense per unit?

sold

Limitations of self imposed budgeting includes?

Budgetary slack, and suboptimal budget reccomendations

Control involves what?

Steps taken to ensure that steps towards meeting the goal are being followed

If invetory levels are ______ the result cam lead to lost sales or last-minute high cost prod efforts??

insuffiencient

What is a cash budget

is a detailed plan showing how cash resources will be acquired and used.

Planning

involves developing goals and preparing various budgets to achieve those goals.

Budget

is a detailed plan for the future that is usually expressed in formal quantitative terms

Control

involves gathering feedback to ensure that the plan is being properly executed or modified as circumstances change\

self-imposed budgets

is a budget that is prepared with the full cooperation and participation of managers at all levels. Page 336

Which of following is needed to prepare a sales budget?

Budgeted number of units sold

Which of the following budgets shows the companys planned proift and serves as a becnhmark agaisnt whcih subsequent company performance can be measured?

Budgted I/s

The master budget culminates in a what budget?____________ , a budgeted i/s and a budgeted b/s?

Cash

Recognizing individuals at all levels of the org as a team member whose views and judgements are valued by top management is an advantage of?

Self imposed budget

A detailed plan for the future that is usually expressed in formal quantitaive terms is?

A budget

Deevloping goals for budget is?

Planning

The dm budget directly relies on the ______

production budget

Budgets do what?

Communicate managements plan throughout the org

12 month budget that rolls forward one month as the current month is completed is called an ????

Continous or perpetual budget

What is usually the major source of receipts in the receipts section of cash budget????

Sales

All costs of Production other than Dm and Dl are shown on the _____ budget

MOH

Calculation of unit product cost requires info from the ______ budget

MOH

A company with adequate cash balances at beg and end of year?

May still have cash defiency issues during the year

A budgeted b/s is developed using data from the _______ of the budget period and data contained in various schedules?

beg

When a manager creates a budget that is too easy to attain what occurs?

budgetary slack

When preparing a MOH budget the total budgeted cost must be adjusted for ________ to deterimne the cash disbursemtns for o/h

depreciation expense

Responsibility Accounting

that a manager should be held responsible for those items—and only those items—that the manager can actually control to a significant extent. Each line item (i.e., revenue or cost) in the budget is the responsibility of a manager who is held responsible for subsequent deviations between budgeted goals and actual results. In effect,

What number does the DM budget take directly from the production budget?

Required Production

The Dl budget is based on the _____ budget

Prodcution

The first line of DL budget consists of the budgeted units expected to be ______ during the period

Producded

The Dl budget is based on the _____

Production

Production and selling and admin expenses are prepared using info directly from the ______ budget

Sales

Which of the following is needed to calculate RM to be purchased on the DM budget?

Beg inv of RM and RM required per unit

A companys panned netprofit that serves as a benchmark agaisnt whcihh subsequent company perfomacne can be measured is shown on the budgeted________

I/s

A perpetual budget keeps managers focused at least one year ahead by adding one:

Month to the end of the budget as each month comes to a close

What is part of the master budget?

A sales budget, including a schedule of expected cash collections. A production budget (a merchandise purchases budget would be used in a merchandising company). A direct materials budget, including a schedule of expected cash disbursements for purchases of materials. A direct labor budget. A manufacturing overhead budget. An ending finished goods inventory budget. A selling and administrative expense budget. A cash budget. A budgeted income statement. A budgeted balance sheet.

What do budgets include?

Budgets communicate management's plans throughout the organization. Budgets force managers to think about and plan for the future. In the absence of the necessity to prepare a budget, many managers would spend all of their time dealing with day-to-day emergencies. The budgeting process provides a means of allocating resources to those parts of the organization where they can be used most effectively. The budgeting process can uncover potential bottlenecks before they occur. Budgets coordinate the activities of the entire organization by integrating the plans of its various parts. Budgeting helps to ensure that everyone in the organization is pulling in the same direction. Budgets define goals and objectives that can serve as benchmarks for evaluating subsequent performance.

More accurate estimates and higher motivation are generally the result of using an what budget?

Particpative

Under the concept of __________ managers should only be held accountable for items they can actually control?

responsivbily accotuning

Advantages of Self imposed budgets

Individuals at all levels of the organization are recognized as members of the team whose views and judgments are valued by top management. Budget estimates prepared by front-line managers are often more accurate and reliable than estimates prepared by top managers who have less intimate knowledge of markets and day-to-day operations. Motivation is generally higher when individuals participate in setting their own goals than when the goals are imposed from above. Self-imposed budgets create commitment. A manager who is not able to meet a budget that has been imposed from above can always say that the budget was unrealistic and impossible to meet. With a self-imposed budget, this claim cannot be made

What is subtracted from total budgeted selling and admin expense to determine cash disbursements for selling and admin expenses?

NOn-cash expsess

A budget that keeps managers focused at least one yeat ahead is a continous or what kind of budget?

Perpertual

Developing goals and preparing various budgets to acheive those goals is part of?

Planning

Which of the following budgets are directly based on info from sales budget?

Prod budget selling and admin expense budget