A306 Chapter 8

Facing labor shortages or having to hire or lay off workers at awkward times are consequences of Blank______. Multiple choice question. companies having a small human resources department a decrease in sales neglecting to budget the amount of labor time that will be needed excess beginning inventory

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

The direct materials budget directly relies on the Blank______ budget. Multiple choice question. sales production direct labor merchandise purchases

production

Because all other parts of the budget depend on it, if the Blank______ budget is inaccurate, the rest of the budget will be inaccurate. Multiple choice question. production cash direct materials sales

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 preparing the Blank______ budget. Multiple choice question. sales cash production direct materials

sales

To calculate total sales on the sales budget, multiply budgeted sales in units by Blank______. Multiple choice question. number of units sales price per unit budgeted unit sales

sales price per unit

If a cash budget is prepared by quarter, the beginning cash balance for the year is the same as the beginning cash balance for the ____ quarter and the ending cash balance for the year is the same as the ending cash for the ___

first, last

A company's planned net profit that serves as a benchmark against which subsequent company performance can be measured is shown on the budgeted _________________

income statement

he cash budget Blank______. Multiple choice question. uses information from the budgeted balance sheet and income statement is the first budget prepared in the master budget process is prepared near the end of the master budget process

is prepared near the end of the master budget process

Using budgeting assumptions when preparing the master budget, Blank______. Multiple choice question. makes it easier to answer "what-if" questions increases the complexity of the process involves adjusting data inputs within each master budget schedule

makes it easier to answer "what-if" questions

All costs of production other than direct materials and direct labor are shown on the Blank______ budget. Multiple choice question. merchandise purchases manufacturing overhead cash ending finished goods inventory

manufacturing overhead

The calculation of unit product cost requires information from the Blank______ budget Multiple choice question. selling and administrative manufacturing overhead cash ending finished goods inventory

manufacturing overhead

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

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

master

The first line of the direct labor budget consists of the budgeted units expected to be Blank______ during the period. Multiple choice question. produced sold

produced

In a manufacturing company, the Blank______ budget shows the number of units that must be manufactured to satisfy sales needs and provide for the desired ending inventory. Multiple choice question. direct materials sales cash production

production

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

production

The budgeted income statement does NOT rely on information from the Blank______ budget. Multiple choice question. ending finished goods inventory sales selling and administrative expense production

production

The direct labor budget is based directly on the Blank______ budget. Multiple choice question. sales manufacturing overhead raw materials production

production

Required borrowings on a cash budget is calculated by Blank______. Multiple choice question. adding the desired ending cash balance to the amount of the cash deficiency subtracting the desired ending cash balance from the amount of cash excess adding the desired ending cash balance to the amount of cash excess subtracting the beginning cash balance from the amount of the cash deficiency

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

The receipts section of the cash budget lists Blank______. Multiple choice question. total sales for the period total credit sales all cash inflows all cash inflows, except from financing

all cash inflows, except from financing

Because it is needed for the schedule of expected cash collections, the annual master budget file includes the ______________________

balance sheet

The annual master budget file includes the Blank______ from last year because it is needed for the schedule of expected cash collections. Multiple choice question. cash budget sales budget balance sheet income statement

balance sheet

Developing goals and preparing various budgets to achieve those goals is part of Blank______,

planning

Budgets are used for two distinct purposes: Blank______ and Blank______. Multiple choice question. advising; consulting planning; control benchmarking; integrating executing; overseeing

planning; control

Budgeted expenses for areas other than manufacturing are shown on the Blank______ budget. Multiple choice question. cash manufacturing overhead ending finished goods inventory selling and administrative

selling and administrative

In large organizations, many smaller individual budgets submitted by department heads and other responsible people comprise the Blank______ budget. Multiple choice question. manufacturing overhead selling and administrative cash ending finished goods inventory

selling and administrative

budget

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

To prepare a budgeted balance sheet as of December 31, 2023, data is needed from the Blank______ December 31, 2022. Multiple choice question. statement of cash flows for the year ended balance sheet as of income statement for the year ended

balance sheet as of

The cash budget uses information from several other budgets. Which of the following budgets is NOT used to prepare the cash budget? Multiple choice question. Direct labor Selling and administrative Sales Production

Production

Master budget schedules Blank______. Multiple select question. answer several key questions for a company may be prepared in any order are based on estimates and assumptions

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

In a manufacturing company, the budgets for manufacturing costs, including the direct materials budget, the direct labor budget, and the manufacturing overhead budget are all based 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? Multiple choice question. Cash Sales Production Finished goods inventory

Production

S&P Enterprises has scheduled direct material purchases of $100,000 in January, $130,000 in February and $150,000 in March. The company pays for 75% of its purchases in the month of purchase and 25% the month after the purchase. Calculate the expected cash disbursements for the month of February. Multiple choice question. $122,500 $130,000 $135,000 $107,500

$122,500

S&P Enterprises has scheduled direct material purchases of $120,000 in April, $140,000 in May and $160,000 in June. The company pays for 75% of its purchases in the month of purchase and 25% the month after the purchase. Calculate the expected cash disbursements for the month of May. Multiple choice question. $125,000 $145,000 $105,000 $135,000

$135,000

Madison Corporation's expected beginning cash balance is $35,000. Cash collections are budgeted at $50,000 and cash disbursements are estimated to be $80,000. The minimum required cash balance is $20,000 and the company can borrow as much as needed in increments of $10,000. Calculate the expected ending cash balance for the month. Multiple choice question. $25,000 $5,000 $20,000

$25,000

Given budgeted sales of 10,000 units, desired ending inventory of 5,000 units, and beginning inventory of 2,000 units, required production is Blank______ units. Multiple choice question. 10,000 7,000 15,000 13,000

13,000 (10,000 + 5,000 - 2,000)

If desired ending inventory is 25% of next month's sales, the number of units to be produced in March is Blank______. Multiple choice question. 16,000 17,000 17,250 21,000

17,000

Which of the following is needed to calculate raw materials to be purchased on the direct materials budget? Multiple select question. Budgeted unit sales Ending finished goods inventory Beginning inventory of raw materials Raw materials required per unit

Beginning inventory of raw materials Raw materials required per unit

Which of the following budgets shows the company's planned profit and serves as a benchmark against which subsequent company performance can be measured? Multiple choice question. Budgeted income statement Budgeted balance sheet Budgeted selling and administrative expenses Manufacturing overhead budget

Budgeted income statement

Which of the following is not found in the financing section of the cash budget? Multiple choice question. Cash deficiency Interest Borrowings Repayments

Cash deficiency

What number does the direct materials budget take directly from the production budget? Multiple choice question. Required production Beginning raw materials inventory Budgeted sales Ending inventory of finished goods

Required production

What is usually the major source of receipts in the receipts section of the cash budget? Multiple choice question. Gains Insurance proceeds Sales Interest received

Sales

Which of the following budgets are directly based on information from the sales budget? Multiple select question. Selling and administrative expense budget Direct materials budget Direct labor budget Production budget

Selling and administrative expense budget Production budget

A budgeted balance sheet is developed using data from the Blank______ of the budget period and data contained in the various schedules. Multiple choice question. end average beginning

beginning

The final schedule of the master budget is the Blank______. Multiple choice question. budgeted income statement cash budget budgeted balance sheet sales budget

budgeted balance sheet

budgets

communicate management's plan throughout the organization

When creating an Excel budget and performing what-if analysis, it is generally easiest to Blank______. Multiple choice question. create the budget with a budgeting assumption tab adjust data inputs within each master budget schedule copy the master budget and make change to the copy only

create the budget with a budgeting assumption tab

Budgets Blank______. Multiple select question. define goals and objectives that can serve as benchmarks for evaluating subsequent performance coordinate the activities of the entire organization by integrating the plans of its various parts and the budgeting process can uncover potential bottlenecks before they occur provide each department with the same amount of money to spend, so that all departments are treated fairly force managers to think about and plan for the future

define goals and objectives that can serve as benchmarks for evaluating subsequent performance coordinate the activities of the entire organization by integrating the plans of its various parts and the budgeting process can uncover potential bottlenecks before they occur force managers to think about and plan for the future (Money allocated, not all same)

Working hours required to satisfy the production budget are shown on the Blank______ budget. Multiple choice question. direct labor merchandise purchases cash direct materials

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 materials

In a manufacturing company, the Blank______ budget details the raw materials that must be purchased to fulfill the production budget and provide for adequate inventories Multiple choice question. sales direct materials merchandise purchases production

direct materials

The cost of unsold units is computed on the Blank______ budget. Multiple choice question. production ending finished goods inventory sales manufacturing overhead

ending finished goods inventory

Risks of not knowing in advance how much labor time will be needed throughout the budget period includes Blank______. Multiple select question. erratic layoffs low employee morale excessive inventory levels labor shortages

erratic layoffs low employee morale labor shortages

The amounts under the Year column in the cash budget always equal the sum of the amounts for the months or quarters of the budget. True false question.

false (not always equal)

Borrowing money is required whenever Blank______. Multiple select question. the cash excess is less than the minimum required cash balance the cash excess is greater than the minimum required cash balance there is a cash deficiency the cash excess equals the minimum required cash balance

there is a cash deficiency the cash excess is less than the minimum required cash balance

The ending finished goods inventory budget computes the cost of Blank______ units. Multiple choice question. sold unsold

unsold

On the cash budget, what is subtracted from total cash available to find the cash excess or deficiency? Multiple choice question. Cash inflows Cash disbursements Noncash items Selling and administrative expenses

Cash disbursements

Which of the following budgets are needed to calculate unit product costs? Multiple select question. Selling and administrative Direct labor Cash Direct materials Manufacturing overhead

Direct labor Direct materials Manufacturing overhead

Which of the following budgets are needed to calculate unit product costs? Multiple select question. Manufacturing overhead Selling and administrative Cash Direct materials Direct labor

Direct materials Direct labor Manufacturing overhead

Which of the following is needed to prepare a sales budget? Multiple choice question. Desired ending inventory The budgeted number of units to be sold Desired ending inventory of raw materials Beginning inventory of finished goods

The budgeted number of units to be sold

Many of the schedules in a master budget are based on a variety of management estimates and assumptions. True false question

True