ACC Exam 3
* the cash excess is less than the minimum required cash balance * there is a cash deficiency
Borrowing money is required whenever__________.
selling and administrative
Budgeted expenses for areas other than manufacturing are shown on the _____ budget.
direct materials
In a manufacturing company, the ___________, ___________ (2words) budget details the raw materials that must be purchased to fulfill the production budget and to provide for adequate inventories.
production
the direct labor budget is based directly on the ____ budget
cost of goods sold
the first line of a merchandise purchases budget expressed in dollars is budgeted __________.
sales
the first step in the budgeting process is preparing the _________ budget
makes it easier to answer "what-if" questions
using budgeting assumptions when preparing the master budget, ______
master
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.
budgetary slack
When a manager creates a budget that is too easy to attain, ______ occurs
beginning
A budgeted balance sheet is developed using data from the Blank______ of the budget period and data contained in the various schedules.
merchandise purchases
The amount of goods to be acquired from suppliers during the period is shown on the Blank______ budget
ending balance sheet
The budgeted income statement does not contain data from the Blank______.
cost of goods sold
The first line of a merchandise purchases budget expressed in dollars is budgeted __________.
produced
The first line of the direct labor budget consists of the budgeted units expected to be Blank______ during the period.
Balance Sheet
The first tab included in the master budget file is generally a(n) Blank______ because it is needed for the schedule of expected cash collections.
True
Unless a company operates on a 100% cash basis, with no accounts receivable, it is unlikely that sales will ever equal cash collections. T/F
Sales
What is usually the major source of receipts in the receipts section of the cash budget?
create the budget with a budgeting assumption tab
When creating an Excel budget and performing what-if analysis, it is generally easiest to Blank______.
desired ending inventory of units
Which of the following is NOT included on the sales budget?
C. Cash deficiency
Which of the following is not found in the financing section of the cash budget? A. Repayments B. Borrowings C. Cash deficiency D. Interest
sales
Because all other parts of the budget depend on it, if the ______ budget is inaccurate, the rest of the budget will be inaccurate.
balance sheet
Because it is needed for the schedule of expected cash collections, and the cash budget the annual master budget file generally starts with the beginning __________ ____________.(two words)
direct materials
in a manufacturing company the __________ budget details the raw materials that must be purchased to fulfill the production budget and provide for adequate inventories
direct materials
in a manufacturing company, the _________ budget details the raw materials that must be purchased to fulfill the production budget and provide for adequate inventories.
cash
The receipts, disbursements, excess or deficiency, and financing section are all parts of the _________ budget.
manufacturing overhead
the calculation of unit product cost requires information from the _______ budget.
the cash excess is greater than the minimum required cash balance
A company can repay outstanding principal and interest when __________.
planning; control
Budgets are used for two distinct purposes: Blank______ and Blank______.
communicate management's plan throughout the organization.
Budgets_________
$35,000 + $50,000- $80,000 = $5,000. Since they can borrow in increments of $10,000 they must borrow $20,000 to meet or exceed the minimum cash balance making the ending balance $25,000
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.
True
Many of the schedules in a master budget are based on a variety of management estimates and assumptions. T/F?
A, D
The selling and administrative expense budget________ A. estimates nonmanufacturing expenses B. begins with budgeted quarterly unit production C. excludes all noncash expenses D. is divided into variable and fixed components
balance sheet as of
To prepare a budgeted balance sheet as of December 31, 20x4, data is needed from the _________ December 31, 20x3
False
Total sales for the year reported on the Sales Budget will always be equal to expected cash collections for the year. T/F?
budget period
is the length of time a budget should cover
Budgeted income statement
what is the name of the company's planned profit budget?
Sales
what is usually the major source of receipts in the receipts section of the cash budget ?
A. Desired ending inventory of units
which is not included on the sales budget? A. Desired ending inventory of units B. Expected cash collections C. Budgeted number of units to be sold D. Selling price per unit
direct labor
working hours required to satisfy the production budget are shown on the _______ budget.
a budget
A detailed plan for the future that is usually expressed in formal quantitative terms is Blank______.
budget
A detailed plan for the future that is usually expressed in formal quantitative terms is a(n)__________.
sales
Because all other parts of the budget depend on it, if the Blank______ budget is inaccurate, the rest of the budget will be inaccurate.
B, C, D, E
Budgets________. A. provide each department with the same amount of money to spend, so that all departments are treated fairly B. encourage managers to think about and plan for the future C. coordinate the activities of the entire organization by integrating the plans of its various parts D. and the budgeting process can uncover potential bottlenecks before they occur E. define goals and objectives that can serve as benchmarks for evaluating subsequent performance
control/controlling
Gathering feedback to ensure that the plan is being followed is referred to as___________-
production
In a manufacturing company, the ________ budget is prepared right after the sales budget.
production
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.
motivation, accuracy, accountability
Involving lower-level managers increases Blank______ in the budgeting process.
* suboptimal budget recommendations * budgetary slack
Limitations of self-imposed budgeting include Blank______.
budgetary slack, suboptimal budget recommendations
Limitations of self-imposed budgeting include ______. unrealistic profit targets, budgetary slack, a broad strategic perspective, suboptimal budget recommendations
$15,000
Madison Corporation's expected beginning cash balance is $22,000. Cash collections are budgeted at $60,000 and cash disbursements are estimated to be $75,000. The minimum required cash balance is $20,000 and the company can borrow as much as needed in increments of $5,000. Required borrowings for the period equal $ .
A, B
Master budget schedules ______. (choose all that apply) A. are based on estimates and assumptions B. answer several key questions for a company C. may be prepared in any order
lower-level managers
More accurate estimates are generally the result of having profit targets set by ______
cash disbursements
On the cash budget, what is subtracted from total cash available to find the cash excess or deficiency?
manufacturing overhead
all costs of production other than direct materials and direct labor are shown on the ______( 2 words) budget.
produced
the first line of the direct labor budget consists of the budgeted units expected to be _________ during the period.
responsibility accounting
the idea that a manager should be help responsible for only those items they can actually control
direct labor
the number of working hours required to satisfy the production budget in shown on the _______, _________ (2 words) budget.
A, C, D,
which of the following budgets are needed to calculate unit product costs? A. Manufacturing overhead B. Selling and administrative C. Direct labor D. Direct materials E. Cash