managerial chapter eight

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

1. beginning inventory of raw materials 2. raw materials required per unit

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

1. direct labor budget 2. manufacturing overhead budget 3. direct materials budget

A detailed plan for the future, usually expressed in formal quantitative terms.

budget

limitations of self-imposed budgeting include

budgetary slack and suboptimal budget recommendations

Gathering feedback to ensure that the plan is being followed is referred to as ____:

control

Working hours required to satisfy the production budget are shown on the ____ budget:

direct labor

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

The section on the cash budget that summarizes all cash payments that are planned for the budget period is the cash ____ section:

disbursements

The cost of unsold units is computed on the ____ budget:

ending finished goods inventory

A company's planned net profit that serves as a benchmark against which subsequent company performance can be measured is shown in the budgeted ____ ____:

income statement

All costs of production other than direct materials and direct labor are shown on the _____ _____ budget:

manufacturing overhead

A number of separate but interdependent budgets that formally lay out the company's sales, production' and financial goals is contained in the

master budget

more accurate estimates and higher motivation are generally the result of using a _____ budget

participative

Developing goals and preparing various budgets to achieve those goals is part of the ____ process:

planning

In a manufacturing company, the ____ budget shows the number of units that must be manufactured to satisfy needs and provide for the desired ending inventory:

production

the first step in the budgeting process is the preparation of the __ budget.

sales

To calculate total sales on the sales budget, multiply budgeted sales in units by:

sales price per unit

In large organizations, this budget would be a compilation of many smaller, individual budgets submitted by department heads and other persons responsible for the ___ budget

selling and administrative expense

A budgeted balance sheet is developed using data from the ____ of the budget period and data contained in the various schedules:

beginning

Budgets:

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

borrowing money is required whenever

- there is a cash deficiency - the cash excess is less than the minimum required cash balance