ACC2- ch8

when a manager creates a budget that understates expected revenues or overstates expected expenses _______ _______ occurs

budgetary slack

the final step in the master budgeting process is to prepare the

budgeted balance sheet

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

budgeted production

total sales on the sales budget equals:

budgeted unit sales X budgeted sales price per unit

sometimes budgetary slack-

can be beneficial as a way to hedge against uncertainty or future events than cannot be anticipated

a future oriented version of the statement of cash flows

cash budget

the operating budgets feed directly into the _____ ______ which then feeds directly into the budgeted balance sheet

cash budget

budgets:

communicate managements plan throughout the organization

keeps managers focused atleast one year ahead

continuous or rolling budget

controlling involves developing goals and preparing various budgets to achieve these goals

false

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

false

the budgeted _____ ________ shows a companys planned profit

income statement

zero-based budgeting

managers must justify their budget each year by starting form scratch

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

manufacturing overhead

the calculation of unit product cost requires information from the _____ budget

manufacturing overhead

each component of a ______ budget is based on or provides input for another component

master

comprehensive set of budgets that covers all phases of planned activities for a specific period

master budget

the budgeted income statement is formed from the combined _____ budgets

operating

includes the sales, productions, and purchases budgets

operating budgets

allows employees through out the organization to have input into the budget-setting process

participative budget

_______ involved developing goals for the budget

planning

budgets are used for two distinct purposes:

planning and controlling

the direct materials budget directly relies on the _______ budget

production

the number of units that must be produced to satisfy sales needs and to provide for the desired ending inventory is shown on the

production budget

which is NOT included on a budgeted cash payments budget?

production in units

the production budget is based upon the

sales budget

what budget is prepared first?

sales budget

the first step in preparing the master budget processs is the

sales/forecast budget

tactics are:

specific actions or mechanisms

planning starts with managers':

strategic plan

the starting point of the planning process is is managements _______ ________ or vision for the organization

strategic plan

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

the budgeted number of units to be sold

which budget shows the number of units needed to satisfy sales and provide the desired ending inventory?

the production budget

budgetary slack occurs when a manager submits a budget that is

too easy to attain

the entire budget must be created form scratch every period when using

zero-based budgeting

a continuous or rolling budget:

-adds one period to the end of the budget as each period comes to a close -helps avoid games at the end of a budget period -keeps managers in continuous planning mode

short-term objectives:

-are an important component of long-term objectives -need to be achieved in one year or less

when preparing a raw materials purchases budget, which of the following is needed to calculate raw materials to be purchased?

-beginning inventory of raw materials -raw materials per unit

the manufacturing overhead budget includes:

-depreciation on product equipment -indirect manufacturing costs

three sections of the cash budget are:

-disbursements -receipts -financing

financial budgets:

-impact the budgeted balance sheet -include the cash budget -include the capital expenditures budget

the manufacturing overhead budget incudes:

-indirect manufacturing costs -depreciation of production equipment

translates company objectives into financial terms

a budget

budgets that are most likely to motivate employees:

are tight but attainable

a detailed document that identifies resources and expenditures that will be required over limited time (typically a year) is a

budget

the raw material purchases, direct labor and manufacturing overhead budgets are all based on the

production budget

selling and administrative expense budget

budget that shows the budgeted expenses for areas other than the manufacturing

______ involved determining if goals have been followed

controlling

which budgets are NOT needed in service firms

-manufacturing overhead -production

which of the following are needed to calculate unit product costs

-manufacturing overhead budget -direct materials budget -direct labor budget

the budgeted cost of goods sold is based on:

expected sales