Chapter 7 LearnSmart

Top management should review all self-imposed budgets to ensure that the budget is too easy to attain. Setting easily attainable targets describes:

budgetary slack

Which of the following budgets shows the company's planned profit and serves as a benchmark against which subsequent company performance can be measured.

budgeted income statement

Collections on credit sales made to customers in prior periods plus collections on sales made in the current budget period equals expected ________ collections.

cash

Gathering feedback to ensure that the plan is being followed is referred to as ________.

control

The number of working hours required to satisfy the production budget is shown on the ________ ________ budget.

direct labor

In a manufacturing company, the ________ budget shows the number of units that must manufactured to satisfy sales needs and provide for the desired ending inventory.

production

The first step in the budgeting process is preparing the ________ budget.

sales

The section on a cash budget that summarizes all cash payments that are planned for the budget period is the cash ________ section.

disbursments

A budget prepared with the full cooperation of management at all levels is a ________ budget.

self-imposed or participative

The budget that shows the budgeted expenses for areas other than manufacturing is the ________ and ________ expense budget.

selling and administrative

A plan for acquiring and using resources over a period of time is referred to as:

the budget

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

manufacturing overhead

An essential tools 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

Which budget is prepared directly after the sales budget in a manufacturing company?

production budget

The idea that a manager should be held accountable for only the items the manager can actually is the basis of:

responsibility accounting

Budgets

- define goals and objectives that can serve as benchmarks for evaluating subsequent performance - coordinate the activities of the entire organization by integrating the plans of its various parts - and the budgeting process can uncover potential bottlenecks before they occur - force managers to think about and plan for the future

The purpose of a budget should be to:

- establish goals - coordinate efforts - motivate people

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

- manufacturing overhead - direct labor budget - direct materials budget

Which of the following is not found in the financing section of the cash budget.

Cash deficiency

Which of the following budgets are directly based on information from the sales budget?

Production budget and Selling and Administrative expense budget

To prepare a budgeted balance sheet as of December 31, 2012, data is needed from the:

- balance sheet as of December 31, 2011

Which of the following is needed to calculate raw materials to be purchased on the direct materials budget?

- raw materials required per unit - beginning inventory of raw materials

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