exam. 4 ag management

items listed in a capital expenditure budget are commonly arranged

by priority to enable managers to use their money on the most important items first

organizing using functional approach does everything except

is very suitable for agriculture

what is not a benefit of budgeting

it determines which personnel should be fired for poor performance

the budgeting process is vulnerable because

it forces each manager to thing through clearly the firms costs and resources

what are the four principles of organization design

keep structure simple allow critical tasks to function without restriction minimize support staff keep working units small

a business structure that is easiest to establish is

sole proprietorship

which. form of agribusiness is owned by a single individual

sole proprietorship

the cash flow budget is

where the actual amount and timing of cash paid and received is projected

groups are never a good idea when organizing a business

false

in Georgia, any business can establish as a cooperative

false

it is easy to give tax advice for all business structures, because there is no difference based on how the business is set up

false

returns and shared equally, regardless of member use, in a cooperative

false

the matrix approach of organization is a combination of other organization approaches that decrease efficiency

false

the sale of stocks represents a promise from the corporation to repay a loan

false

a budget and. financial statement are the same. there is not any difference between them

fasle

the turnaround time for cash invested in a business is usually short, in other words the cash invested in a business reappears quickly as cash sales

fasle

the type of partnership where partners do not have managerial control is

limited partnership

an operating budget

shows how capital will be spent and allocated within the business over the long run planning horizon

proper organization structure requires

1. a clear view of corporate structure and purpose 2. keeping in mind which tasks are most important 3. determination of critical tasks

indicate which decisions should be made by top management.

1. decisions that set company policy 2. decisions that set corporate purpose 3. decisions that determine promotion of employees 4. decisions that determine performance standards

written goals

1. have the power the keep people focused 2. increase the chance that financial objectives will be recognized 3. are a priority in budgeting

what can be considered an advantage of decentralized management

1. keeps decisions and decision-makers close together 2. provides a training ground for younger managers to develop their decisions making skills 3. it frees up top management from day to day tasks 4, lower levels of management can set the broad policies and guidelines that define the firm's purpose

what is a basic objective of cooperatives

1. to provide farmers with a dependable, honest and accurate market for their farm inputs 2. to provide farmers with a dependable, honest and accurate market for their farm outputs

organization based on product approach

1. works best for ag production because of specialization 2. breaks down departments and units by-product approach 3. results in reduced efficiency 4. allows possible duplication of activities

what percentage of businesses fail in the first five years

80%

which corporation is taxed on output as well as the earnings taxed as income

C corporation

which type of corporation can have no more than one hundred shareholders

S corporation

in a centralized decision making system

all decision making authority is held by a small number of top executives who are involved in every decision

maintenance of existing plant and equipment is covered in the_______budget

capital expenditure

which of the following helps project the profitability of an operation within the business for a future period

cash flow budget

can integrate vertically backwards into the farm supply sector

cooperative

has the most legal rights and duties of an individual and therefore, stands as a separate entity from its owners

corporation

the agribusiness that is purchased through the sale of stocks and bonds

corporation

which business structure allows a business to exist is perpetuity

corporation

anther name for variable costs is

costs of goods sold

the activities that must be done well if a business is to achieve it purpose and objectives are

critical tasks

if the success of a business rests heavily on meeting consumers needs, why is so much concern focused on financial objectives and budgeting? what is not true meaning response

customers needs are not important. the only thing important for a business is financial objectives

day to day decision making is carried out by specialized staff, which overall mission is controlled by top executives in a__________ decision making system

decentralized

cash flow budgets are not necessary as long as the enterprise budget shows the venture to be possible

false

in this business structure, each members personal and business assets are available to creditors

ordinary partnership

which agribusiness can be established by either a verbal or a written contract

ordinary partnership

which is not a limitation of budgets

the execution of a budget is automatic. once a budget is set in place the manager foes not have to think about it again until the next year when the planning process begins again

which is not a true statement regarding individuals employed in the human resource, legal, and engineering departments of a firm

they preform line activities

a registered limited liability partnership. must carry liability insurance or other financial security

true

autonomous profit centers put people in charge of their own destiny while offering fast performance feedback

true

each crop or livestock should have an individual enterprise budget to estimate the costs, returns, and profits

true

for a farm repair service with the competitive advantage of providing fast service, it is unacceptable to allow the purchasing department to save money by not always having key parts in stock. A few days delay in receiving the parts is unacceptable

true

having a few layers of management and interrelationships as possible to get the job done ensures that everyone in the organization has a clear understanding of what he/she is suppose to do and how his/her work contributes to the accomplishments of the overall corporate purpose and objective

true

in a cooperative business structure, one person equals one vote regardless of the percentage of business conducted through the cooperative

true

record keeping is important regardless of the business structure

true

special budget cannot take place of good managers

true

the activities approach to organization utilizes the critical need for tasks to break down departments and units

true

the first step in preparing an operating budget is to estimate the costs of providing the products for sale that period

true

the geographic approach of organization allows improved market flexibility

true

to minimize support staff a company should consider hiring put non-essential positions

true

while profitability is important to success of a business, managers should also be concerned with the timing of cash flows because the lapse in time between inflows and outflows can cause business hardships if it is not prepared for cash shortfalls

true