learn smart chapter 9

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?

-selling and administrative expense budget -production budget

Master budget schedules:

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

A quantitative plan for acquiring and using resources over a specified time period is a

budget

A detailed plan showing how cash resources will be acquired and used over a specific time period. It is developed from several budgets that must be adjusted for non-cash items like depreciation expense

cash budget

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

cash disbursements

The most common significant noncash manufacturing overhead cost in most companies is

depreciation

To obtain the total number of units to be produced add ______ to budgeted unit sales

desired ending inventory

The cost of unsold units is computed on the

ending finished goods inventory budget

the cash receipts section of the cash budget lists all cash inflows except from

financing

A budget that may be challenging but still able to be met by competent management exerting reasonable effort is a:

highly achievable budget

When a company does not use self-imposed budgeting, top managers initiate the budgeting process by issuing targets and direct _________ - level managers to prepare budgets that meet those targets

lower

an essential management tool that communicates management's plans throughout the organization, allocates resources and coordinates activities is the

master budget

a company with adequate cash balances at the beginning ad end of the year:

may still have cash deficiency issues during the year

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

merchandise purchases

Operating budgets generally cover a _______ period

one-year

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

planning

The direct labor budget is based on the ______ budget

production

The direct materials budget directly relies on the:

production budget

A budget prepared with the full cooperation of management at all levels is a ____ budget:

self-imposed; participative

The budget that shows the budgeted expenses for areas other than manufacturing is the _____ and _____ expense budget

selling and administrative

Control

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

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

the budgeted number of units to be sold

determining cost of goods sold on the budgeted income statement and valuing ending inventories requires the

unit product cost

Which of the following is used in the cash disbursements schedule?

Payments for raw materials

T or F: A manager is NOT necessarily penalized if actual results do not measure up to the budgeted goals

TRUE