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Which of the following budgets usually shows separate sections for fixed and variable​ costs?

Operating expenses budget and manufacturing overhead budget

is a budgeting process that begins with departmental managers and flows up through middle management to top management.

Participative budgeting

"Capital expenditures​ budget" is best described by which of the following​ concepts?

A​ company's plan to purchase​ property, plant and​ equipment, and other long−term assets

Which of the following is an example of a financial​ budget?

budget balance sheet

often used by companies to review submitted​ budgets, make revisions as​ needed, and approve the final budgets.

budget committees

The final step in the preparation of the financial budget is the preparation of which of the​ following?

budgeted balance sheet

Which of the following types of cash outlays contains its own​ budget?

capital expenditures

Which of the following items is a component of a cash payments​ budget?

cash dividends

The​ ________ budget is a component in a financial budget.

cash, capital expenditures and budget balance sheet

Which of the following is an advantage of the budgeting​ process?

coordinates the activities of the organization

A manager considers all of the following when he or she prepares the cash budget except

depreciation expense

Strategic planning is beneficial because the organization can

establish long term goals that extend 5-10 years

These​ budgets, ________ ​, project both the collection and payment of cash and forecast the​ company's budgeted balance sheet.

financial bugets

Which of the following is an advantage of zero−based ​budgeting?

forces managers to justify each dollar in the budget to ensure that some expenses are lower in a current year compared to what they were in previous years.

A rolling budget is a budget that

is continuously​ updated, so that the next 12 months of operations are always budgeted.

Which of the following should the organization use to initiate a​ budget?

last year's budget, last year's actual amounts and zero-based budgeting

Which of the following is a potential disadvantage of participative​ budgeting

managers may build slack into the budget

the comprehensive planning document for the entire organization.

master budget

​"The comprehensive​ budget" is best described by which of the following​ terms?

master budget

The sales budget and production budget are examples of

operating budgets

Most companies use​ ________ when the managers develop budgets each year.

participative budgeting

Which of the following terms is useful because it compares​ "actual" revenues and expenses against​ "budgeted" revenues and​ expenses?

performance report

The​ ________ budget is a component in an operating budget.

production

The​ ________ budget is the only budget stated only in​ units, not dollars.

production

used to forecast how many units should be made to meet the sales projections.

production budget

On the direct materials​ budget, the total quantity of direct materials to purchase is computed as

quantity needed for production​ + desired end inventory of DM minus− beginning inventory of DM.

_____ is a budget that is continuously updated by adding months to the end of the budgeting period.

rolling budget

is extra inventory of finished goods that is kept on hand in case demand is higher than predicted or problems in the factory slow production

safety stock

The​ ________ budget begins with the number of units to be sold.

sales

In preparing the operating​ budget, the first step is preparing the

sales budget

The​ ________ is a plan that shows the units to be sold and the projected selling price and is also the starting point in the budgeting process.

sales budget

Which of the following budgets or financial statements is part of the operating​ budget?

sales budget

________ is a what−if technique that asks what a result will be if a predicted amount is not achieved or if an underlying assumption changes.

sensitivity analysis

Managers will sometimes build ______ into their budgets to protect themselves against unanticipated expenses or lower revenues.

slack

the process of setting​ long-term goals that may extend several years into the future.

strategic planning

A company sells goods and offers credit terms of​ "net 30​ days." What does this reveal to the company that sold the​ goods?

the customer has up to 30 days to pay back the seller for the goods purchased without penalty

On the production​ budget, the number of units to be produced is computed as

unit sales​ + desired end inventory minus− beginning inventory.

On the direct labor​ budget, the total quantity of direct labor hours needed is computed as

units to be produced x direct labor hour per unit

the difference between actual and budgeted figures and is used to evaluate how well the manager controlled operations during the period.

variance

When an organization builds its budgets from the ground​ up, it is using

zero-based budgeting

Which of the following alternatives reflects the proper order of preparing components of the master​ budget? 1. Production budget 2. Sales budget 3. Direct materials budget

2,1,3

Kotrick Company has beginning inventory of 15,000 units and expected sales of 23,000 units. If the desired ending inventory is 16,000 ​units, how many units should be​ produced?

24,000

"Combined cash​ budget" is best defined by which of the​ following?

Details about how the company expects to move out of the beginning cash balance and into the desired ending cash balance

Regarding the budgeting​ process, which of the following statements is true​?

The budget should be designed from the bottom​ up, with input from managers at all levels.


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