Midterm prep

The budgeted income statement does NOT rely on information from the Blank______ budget.

production

The cash budget uses information from several other budgets. Which of the following budgets is NOT used to prepare the cash budget?

production

in a manufacturing company, the budgets for manufacturing costs, including the direct materials budget, the direct labor budget, and the manufacturing overhead budget are all based on the. budget.

production

ABC, Inc.'s expected sales for the first six month of the year are as follows. Month Expected Sales January $120,000 February $150,000 March $160,000 April $200,000 May $220,000 June $250,000 Experience has shown that 60% of sales are collected in the month of sale and 40% are collected the month after sale. Calculate expected cash collections for the month of March. Multiple choice question. $154,000 $156,000 $160,000 $176,000

$160,000 Reason: 60% of March sales ($96,000) + 40% of February sales ($60,000) = $156,000

What the advantages of budgeting

-communicates managements plan throughout the organization - forces managers to think and plan for the future -provides a means of allocating resources -coordinates activities of entire organizations -defines goals and objectives that can serve as benchmarks for performance evaluation

Given budgeted sales of 10,000 units, desired ending inventory of 5,000 units, and beginning inventory of 2,000 units, required production is Blank______ units. 10,000 7,000 15,000 13,000

13,000

Participative budget

A budget that is prepared with the full cooperation of managers at all levels is a self-imposed or _______ budget.

In a manufacturing company, which budget is used as the basis for creating the direct materials budget, the direct labor budget, and the manufacturing overhead budget?

product

% of customers that strongly agree with the statement " your company is committed to enviromental stewardship - Financial -Customer - Internal business process - learning & Growth

Customer

Which of the following is NOT included on the sales budget? Desired ending inventory of units Budgeted number of units to be sold Selling price per unit Expected cash collections

Desired ending inventory of units

Challenging but highly achievable budgets increase the likelihood that lower-level managers will engage in undesirable behavior to secure their desired compensation. true or false

False

Percentage of revenue from green products - Finanical -Customer -Internal Business process -Learning & Growth

Finanical

sales from products less than three years old - Finanical -customer - internal business process - learning & growth

Finanical

Number of employee suggestions implemented - Financial - Customer - Internal Business Process - Learning & Growth

Learning & Growth

With top-down approach to budgeting lower level managers Tend to be more cooperative and committed are not involved in a budgeting process May feel demoralized and resentful Input their knowledge and opinions

May feel demoralized and resentful

What are budget used for?

Planning - developing goals and steps to achieve those goals Control - steps taken to increase the likehood of achieving the goals

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

Selling & administrative expense Production

What the budget period

Typically 12 month period a continuous or perpetual budget in a 12 month budget that rolls forward one month (quarter) is completed

What is a budget?

a budget is quantive plan for accounting & using resources over a specific time period.

n a manufacturing company, the budget is prepared right after the sales budget.

product

Involving lower-level managers increases ______ in the budgeting process.

accuracy motivation accountability

Master budget schedules Blank______.

answer several key questions for a company are based on estimates and assumptions

Because it is needed for the schedule of expected cash collections, and the cash budget the annual master budget file generally starts with the beginning .

balance sheet

The first tab included in the master budget file is generally a(n) Blank______ because it is needed for the schedule of expected cash collections.

balance sheet

When a manager creates a budget that is too easy to attain, Blank______ occurs.

budgetary slack

The final schedule of the master budget is the Blank______.

budgeted balance sheet

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

control

When creating an Excel budget and performing what-if analysis, it is generally easiest to Blank______. create the budget with a budgeting assumption tab copy the master budget and make change to the copy only adjust data inputs within each master budget schedule

create the budget with a budgeting assumption tab

Market share percentage - Finanical - Customer - Internal Business process - learning & growth

customer

Most companies rely solely on self-imposed budgeting when creating budgets. True or False

false

Total sales for the year reported on the Sales Budget will always be equal to expected cash collections for the year. true or false

false

Pounds of waste produced - Financial - Customer - Internal Business process - Learning & Growth

internal business process

number of new products designed - Financial -Customer - Internal business process - learning & growth

internal business process

The cash budget ______.

is prepared near the end of the master budget process

average years of tenure per employee - finanical - Customer -Internal Business Process - learning & growth

learning & growth

More accurate estimates are generally the result of having profit targets set by Blank______.

lower-level managers

When profit targets are set by top managers, ______

lower-level managers use them to prepare budgets goals may be too high or low

Using budgeting assumptions when preparing the master budget, Blank______.

makes it easier to answer "what-if" questions

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

master

An integrated business plan that formally lays out the company's goals is called the Blank______ budget.

master

Challenging but highly achievable budget targets ______.

may help build manager confidence may increase commitment to the budget

what the ROI formula ?

net operating income / average operating assets.

A 12-month budget that rolls forward one month (or quarter) as the current month (or quarter) is completed is called a(n)

rolling

Because all other parts of the budget depend on it, if the Blank______ budget is inaccurate, the rest of the budget will be inaccurate.

sales

Both the production and selling and administrative expense budgets are prepared using information directly from the budget.

sales

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

sales

Limitations of self-imposed budgeting include Blank______.

suboptimal budget recommendations budgetary slack

Many of the schedules in a master budget are based on a variety of management estimates and assumptions. True or false

true