ACC 216 Chapter Eight (final exam)

The cost of unsold units is computed on the ____ budget:

ending finished goods inventory

An essential management tool that communicates management's plans throughout the organization, allocates resources, and coordinates activities is called the _____ budget:

master

Developing goals and preparing various budgets to achieve those goals is part of the ____ process:

planning

The underlying idea behind ____ accounting is that a manager should be held accountable for only those items the manager can actually control:

responsibility

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

sales price per unit

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

selling and administrative

Budgets:

communicate management's plan throughout the organization

The section on the cash budget that summarizes all cash payments that are planned for the budget period is the cash ____ section:

disbursements

To calculate raw materials to be purchased on the direct materials budget, add the desired _____ inventory of raw materials to the raw materials needed based on the _____ budget and _____ the beginning inventory of raw materials to arrive at raw materials to be purchased:

ending, production, deduct

All costs of production other than direct materials and direct labor are shown on the _____ _____ budget:

manufacturing overhead

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

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

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

budget

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

control

Working hours required to satisfy the production budget are shown on the ____ budget:

direct labor

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

income statement

The receipts section of the cash budget lists:

all cash inflows, except from financing

Both the production and selling and administrative expense budgets are prepared using information directly from the ____ budget:

sales

Spot Company's master budget shows expected sales of 10,000 units and expected production of 11,000 units for the month of March. Each unit requires 1/2 hour of direct labor. The direct labor rate is $15.00 per hour. Calculate the expected total direct labor cost for the month of March:

$82,000 Units to be produced x time per unit x rate per hour = 11,000 x 1/2 x $15 = 82,500

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

1. Production budget 2. Selling and administrative expense budget

Master budget schedules:

1. are based on estimates and assumptions 2. answer several key questions for a company

A budgeted balance sheet is developed using data from the ____ of the budget period and data contained in the various schedules:

beginning

When a manager creates a budget that is too easy to attain, ____ occurs:

budgetary slack

Collections on credit sales made to customers in prior periods plus collections on sales made in the current budget period equals expected ____ collections:

cash

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

cash deficiency

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

Payments for direct materials, direct labor, and manufacturing overhead costs are all listed in the ____ section of the cash budget:

disbursements

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

sales

Which budget is a detailed schedule showing the expected sales for the budget period:

sales budget

What is subtracted from total budgeted selling and administrative expenses to determine the case disbursements for selling and administrative expenses:

non-cash expenses

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

production

In a manufacturing company, the ______ budget is prepared right after the sales budget:

production

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

1. beginning inventory of raw materials 2. raw materials required per unit

Which of the following types of budgets keep managers focused one year ahead, so they do not become too narrowly focused on short-term results:

1. Continuous 2. Perpetual -each one will work

Carter Production Inc required production for the first six month of the year is as follows Jan- 50,000 Feb- 70,000 Mar- 85,000 Apr- 105,000 May- 110,000 Jun- 120,000 Each unit requires two pounds of material. Given a desired ending inventory of 20% of the next month's production needs, the pounds of material to be purchased in April is:

212,000 pounds April production needs (105,000 x 2) 210,000 + Ending Inventory (20% of May production needs (110,000 x 2 x 20%) 44,000 - Beginning Inventory (20% of April) 42,000 = 212,000 pounds

The purpose of a budget should be to:

1. establish goals 2. measure operating results 3. isolate areas needing attention

What would happen if a company penalized individuals for not meeting budgeted goals:

1. individuals would become too focused on meeting goals 2. individuals would add too much budgetary slack

Highly achievable budget targets:

1. may generate greater management commitment to the budget 2. are used in most companies 3. may help build manager confidence

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

1. self-imposed 2. participative -both work

ABC Inc.'s expected sales for the first six months of the year are: Jan- 12,000 Feb- 15,000 Mar- 16,000 Apr- 20,000 May- 22,000 Jun- 25,000 If desired ending inventory is 25% of next month's sales, the number of units produced in March is:

17,000 March sales 16,000 + Ending Inventory (25% of April Sales) 5,000 - Beginning Inventory (25% of March Sales) 4,000 = 17,000 units to be produced