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

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

sales

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 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

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

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

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

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

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

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