ACCT chapter 8💕

The calculation of unit product cost requires information from the

manufacturing overhead budget

Each component of a(n)______ budget is based on or provides input for another

master

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

Direct materials budget Direct labor budget Manufacturing overhead budget

Which of the following statements is true?

Understanding the interrelationships of individual budgets is the key to developing a master budget.

The number of units needed to satisfy sales and provide the desired ending inventory is shown on the _____ budget.

production

To calculate the cash balance before financing on the cash budget, add the

beginning cash balance to the budgeted cash receipts and deduct budgeted cash payments

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

budget

Company objectives are translated into financial terms in a(n)______

budget

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

budgeted balance sheet

Total sales on the sales budget equal budgeted unit sales multiplied by_____

budgeted sales price per unit

The operating budgets feed directly into the

cash budget

Budgets ______.

communicate management's plan throughout the organization

Managers look back to determine whether goals were met and take corrective action to improve future results during the ______ part of the cycle.

controlling

The sections of the cash budget are ______.

disbursements collections financing

True or false: Using a participative approach to budgeting is less likely to motivate employees than using a top-down approach.

false

The sections of the cash budget are

financing disbursements collections

Managers put plans into action as part of _____.

implementing

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

manufacturing overhead

Davidson Corporation's master budget shows expected direct labor cost of $90,000 for the month of May. During May, the company's expected sales equal 12,000 units and expected production is 15,000 units. If each unit requires 1/2 hour of direct labor, the budgeted direct labor rate is $

$12 per hour

Sperling 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.

$82,500

The direct materials budget directly relies on the _____ budget.

production

Company objectives are translated into financial terms in a(n)

Budget

Which of the following budgets shows the company's planned profit?

Budgeted income statement

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

Budgeted production

Which of the following is NOT included on a budgeted cash payments budget?

Production in units

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

The budgeted number of units to be sold

To calculate the direct labor requirement for each quarter

multiply the number of direct labor hours required per unit times the number of units to be produced

The pro-forma income statement is based on the combined ______ budgets.

operating

The sales, production, and purchases budgets are all________ budgets.

operating

Advantages of budgeting include Blank______.

providing lead time to solve potential problems forcing managers to think about and plan for the future promoting cooperation and coordination among different areas within the organization providing benchmarks for evaluating performance

The production budget is based upon the_______ budget.

sales

When creating the master budget, the ______ budget is prepared first

sales

Budgeted expenses for costs related to selling the product and managing the business are shown on the

selling and administration budget

When an organization uses a top-down approach to budgeting, Blank______.

the budget is imposed on lower levels of the organization top management sets the budget

When it comes to preparing budgets,

the budgets needed depend upon the type of firm

Budgeted fixed manufacturing overhead per unit is computed by dividing budgeted fixed manufacturing overhead cost by budgeted production units for

the entire year

The operating budgets feed directly into the_______ ________

which then feeds directly into the budget balance sheet