SB 8 (TEST 3)

Required borrowings on a cash budget is calculated by ______.

adding the desired ending cash balance to the amount of the cash deficiency

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

cash deficiency

a budget will

communicate management's plan throughout the organization

When creating an Excel budget and performing what-if analysis, it is generally easiest to ______.

create the budget with a budgeting assumption tab

the section on the cash budget that summarizes all cash payments that are planned for the budget period is the cash ___ section

disbursement

Budgeted expenses for areas other than manufacturing are shown on the ____ budget:

selling and administrative

If inventory levels are ______, the result can lead to lost sales or last-minute, high-cost production efforts.

insufficient

All costs of production other than direct materials and direct labor are shown on the ______ budget.

manufacturing overhead budget

A number of separate, but interdependent, budgets that formally lay out the company's sales, production, and financial goals are contained in the _______ budget.

master

A company with adequate cash balances at the beginning and end of the year,

may still have cash deficiency issues during the year

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

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

selling and administrative

A likely consequence of excessive inventory levels is ______.

storage problems

A company can consider making investments or repay outstanding principal and interest when

the cash excess is greater than the minimum required cash balance

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

master

Operating budgets generally cover a ______ period.

one year

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

planning

Recognizing individuals at all levels of the organization as team members whose views and judgments are valued by top management is an advantage of

positive self-imposed budget

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

The budgeted income statement does NOT rely on information from the ______ budget.

production

The cash budget uses information from several other budgets. Which of the following budgets is NOT used to prepare the cash _________ budget?

production

A manager cannot complain that the budget was unrealistic and impossible to meet when a(n) _________-________ budget is in place.

self-imposed

The final schedule of the master budget is the

budgeted balance sheet

Which of the following budgets shows the company's planned profit and serves as a benchmark against which subsequent company performance can be measured?

budgeted income statement

Gathering feedback to ensure that the plan is being followed is referred to as

controlling

Facing labor shortages or having to hire or lay off workers at awkward times are consequences of ______.

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

Master budget schedules

Are based on estimates and assumptions Answer several key questions for a company

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

Cash disbursements

A 12-month budget that rolls forward one month (or quarter) as the current month (or quarter) is completed is called a(n)

Continuous

What is subtracted from total budgeted selling and administrative expenses to determine the cash disbursements for selling and administrative expenses?

Non-Cash Expenses

Which of the following is needed to prepare a sales budget?

The budgeted number of units to be sold

Budgetary slack occurs when a manager submits a budget that is ______.

Too easy to attain

In a manufacturing company, the ______ budget details the raw materials that must be purchased to fulfill the production budget and provide for adequate inventories

direct materials

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

In a manufacturing company, the ________ budget is prepared right after the sales budget.

productions

A detailed plan for the future, usually expressed in formal quantitative terms.

budget

Working hours required to satisfy the production budget are shown on the ______ budget.

direct labor

Limitations of self-imposed budgeting include

- suboptimal budget - recommendations budgetary slack

Many managers believe that being empowered to create their own self- __________ budgets is the most effective method of budget preparation.

imposed

The cash budget

is prepared near the end of the master budget process

Using budgeting assumptions when preparing the master budget, ____

makes it easier to answer "what-if" questions

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

merchandise purchases

When profit targets are set by top managers,

- waste may occur - too much slack may be allowed - goals may be unrealistically high

Which of the following is needed to calculate raw materials to be purchased on the direct materials budget?

-Beginning inventory of raw materials -Raw materials required per unit

Because it is needed for the schedule of expected cash collections, the annual master budget file includes the _______ from last year.

balance sheet

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

top managers

Highly achievable budget targets

-may generate greater management commitment to the budget -are used in most companies -may help build manager confidence

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

1. Production budget2. Selling and administrative expense budget

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

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.

sales

The first step in the budgeting process is the preparation of the ________ budget.

sales

Which of the following budgets are needed to calculate unit product costs?

1. direct labor budget 2. manufacturing overhead budget 3. direct materials budget

To calculate total sales on the sales budget, multiply budgeted sales in units by

sales price per unit

A budget that is prepared with the full cooperation of managers at all levels is a self-imposed or _______ budget.

participative