Acct Chapter 8
Select all that apply Which of the following budgets are needed to calculate unit product costs?
-Manufacturing overhead budget -Direct materials budget -Direct labor budget
Select all that apply The manufacturing overhead budget includes ______.
-indirect manufacturing costs -depreciation on production equipment
What number does the raw materials budget take directly from the production budget?
Budgeted production
Collections on credit sales made to customers in prior period(s) plus collections on sales made in the current budget period equal ______.
cash receipts
All costs of production other than direct materials and direct labor are shown on the ______ budget.
manufacturing overhead
The amount of goods to be purchased from suppliers during the period is shown on the ______ budget.
merchandise purchases
The direct materials budget directly relies on the ______ budget.
production
Pastoria Enterprises has scheduled raw material purchases of $100,000 in January, $130,000 in February, and $150,000 in March. The company pays for 75% of its purchases in the month of purchase and 25% the month after the purchase. Calculate the expected cash disbursements for the month of February.
$122,500February purchases ($130,000 x 75%) + January purchases ($100,000 x 25%) = 97,500 + $122,500 = $122,500
Select all that apply Which of the following sections are included in the cash budget?
-Financing -Collections
Budgeting is an important part of the ___ and ___ cycle. (Enter only one word per blank.)
Blank 1: planning or plan Blank 2: control or controlling
The budget that shows the budgeted expenses for areas other than manufacturing is the ___ and ___ expense budget. (Enter only one word per blank.)
Blank 1: selling, sales, or marketing Blank 2: administrative or admin
To calculate the cash balance before financing on the cash budget, add the Blank______.
beginning cash balance to the budgeted cash receipts and deduct budgeted cash payments
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
Budgets ______.
communicate management's plan throughout the organization
Managers put plans into action as part of ______.
implementing
The calculation of unit product cost requires information from the ______ budget.
manufacturing overhead
The number of units needed to satisfy sales and provide the desired ending inventory is shown on the ______ budget.
production
Budgeted expenses for costs related to selling the product and managing the business are shown on the ______ budget.
selling and administrative
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
Budgets are used for two distinct purposes: ______ and ______. The first of these purposes relates to developing goals and preparing various budgets, while the second involves comparing actual results to the budget.
planning; controlling
Which of the following budgeting most likely allows employees throughout an organization to have input into the budget-setting process?
Participative budgeting
Which of the following is needed to prepare a sales budget?
The budgeted number of units to be sold
Which of the following statements is true?
Understanding the interrelationships of individual budgets is the key to developing a master budget.
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.
$25,000 Reason: $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.
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 Reason: 11,000 × 1/2 × $15 = $82,500.
Select all that apply Advantages of budgeting include ______.
-providing lead time to solve potential problems -forcing managers to think about and plan for the future -providing benchmarks for evaluating performance -promoting cooperation and coordination among different areas within the organization
A future-oriented version of the statement of cash flows is the ___ ___ . (Enter only one word per blank.)
Blank 1: cash Blank 2: budget
The operating budgets feed directly into the ___ ___ , which then feeds directly into the budgeted balance sheet. (Enter only one word per blank.)
Blank 1: cash Blank 2: budget
The operating budgets feed directly into the ___ ____, which then feeds directly into the budgeted balance sheet. (Enter only one word per blank.)
Blank 1: cash Blank 2: budget
Which of the following provides critical information managers need to manage daily operations?
Cash budget
True or false: Budgeting is more important in manufacturing firms than in other types of businesses.
False
True or false: Using a participative approach to budgeting is less likely to motivate employees than using a top-down approach.
False
Which of the following is NOT included on a budgeted cash payments budget?
Production in units
The number of units that must be made to satisfy sales needs and to provide for the desired ending inventory is shown on the ___ budget. (Enter only one word per blank.)
Blank 1: production
A pro forma budgeted balance sheet is developed from the ___ budgets. (Enter only one word per blank.)
Blank 1: financial or previous
Fill in the blank question. A company's planned profit is shown on the budgeted ___ ___. (Enter only one word per blank.)
Blank 1: income Blank 2: statement
A comprehensive set of budgets that covers all phases of planned activities for a specific period is called the ____ budget. (Enter only one word per blank.)
Blank 1: master
Setting goals and objectives for the future is done during the ___ phase. (Enter only one word per blank.)
Blank 1: planning
Fill in the blank question. The budget that shows the budgeted expenses for areas other than manufacturing is the ___ and ___ expense budget. (Enter only one word per blank.)
Blank 1: selling, sales, or marketing Blank 2: administrative or admin
Which of the following budgets shows the company's planned profit?
Budgeted income statement
