Question 1

Budgeted manufacturing overhead includes indirect manufacturing costs,but not selling or administrative costs.Budgeted manufacturing overhead includes all indirect manufacturing costs such as rent,depreciation on equipment,and utilities.

Accepted Answer

A) True 
 B)False

Question 2

Harney,Inc.has prepared the following budgets for March.In March,budgeted production equals budgeted sales,and raw materials inventory will stay constant.What is budgeted cost of goods sold for March?

Accepted Answer

A)  $14,560
B)  $24,960
C)  $27,560
D)  $37,960E) All of the above
F) B) and D)

Question 3

A short-term objective is a specific action managers use to reach their long term goals.A short-term objective is a specific goal that managers need to achieve in no more than a year to reach their long-term goals.

Accepted Answer

A) True 
 B)False

Question 4

Skylark has forecast production for the next three months as follows: July 4,900 units,August 6,600 units,September 7,500 units.Monthly manufacturing overhead is budgeted to be $17,000 plus $6 per unit produced.What is budgeted manufacturing overhead for August?

Accepted Answer

A)  $56,600
B)  $17,000
C)  $39,600
D)  $62,000E) C) and D)
F) A) and B)

Question 5

The direct labor budget is based on budgeted sales levels.The direct labor budget is based on budgeted production levels.

Accepted Answer

A) True 
 B)False

Question 6

Pacific has forecast sales for the next three months as follows: July 4,000 units,August 6,000 units,September 7,500 units.Pacific's policy is to have an ending inventory of 40% of the next month's sales needs on hand.July 1 inventory is projected to be 1,500 units.Monthly costs are budgeted as follows: What is budgeted manufacturing overhead cost for August?

Accepted Answer

A)  $50,000
B)  $47,000
C)  $33,000
D)  $32,000E) B) and C)
F) All of the above

Question 7

Manufacturing firms prepare a separate raw materials purchases budget for each material used in production.Each material should have its own budget.

Accepted Answer

A) True 
 B)False

Question 8

Grover has forecast sales to be $125,000 in February,$135,000 in March,$150,000 in April,and $140,000 in May.The average cost of goods sold is 70% of sales.All sales are made on credit and sales are collected 60% in the month of sale,and 40% the month following.What are budgeted cash receipts in April?

Accepted Answer

A)  $105,000
B)  $141,000
C)  $150,000
D)  $144,000E) None of the above
F) B) and D)

Question 9

Which of the following is not included in the operating budget?

Accepted Answer

A)  Budgeted balance sheet
B)  Sales budget
C)  Selling and administrative budget
D)  Raw materials purchases budgetE) All of the above
F) None of the above

Question 10

Which of the following is not a source that can be used in preparing the sales budget?

Accepted Answer

A)  Prior sales.
B)  The production budget.
C)  Industry trends.
D)  Marketing activities.E) B) and D)
F) A) and C)

Question 11

Larken has forecast sales for the next three months as follows: July 4,000 units,August 6,000 units,September 7,500 units.Larken's policy is to have an ending inventory of 40% of the next month's sales needs on hand.July 1 inventory is projected to be 1,500 units.Monthly manufacturing overhead is budgeted to be $17,000 plus $6 per unit produced.What is budgeted manufacturing overhead for August?

Accepted Answer

A)  $56,600
B)  $17,000
C)  $53,000
D)  $38,600E) B) and D)
F) All of the above

Question 12

Jaybird Inc.produces leather handbags.The sales budget for the next four months is: July 5,000 units,August 7,000,September 7,500,October 8,000.Jaybird Inc.'s ending finished goods inventory policy is 10% of the following month's sales.Each handbag requires 1.3 hours of unskilled labor (paid $8 per hour) and 2.2 hours of skilled labor (paid $15 per hour) .How much is total labor cost during the three months July through September?

Accepted Answer

A)  $69,300
B)  $327,670
C)  $846,300
D)  $859,320E) C) and D)
F) B) and D)

Question 13

Dayton has forecast sales to be $205,000 in February,$270,000 in March,$290,000 in April,and $310,000 in May.The average cost of goods sold is 60% of sales.All sales are made on credit and sales are collected 50% in the month of sale,30% the month following and the remainder two months after the sale.What are budgeted cash receipts in May?

Accepted Answer

A)  $267,000
B)  $296,000
C)  $161,250
D)  $241,500E) B) and C)
F) C) and D)

Question 14

Which component of the cash budget is shown as a line item on the budgeted balance sheet?

Accepted Answer

A)  Budgeted cash collections
B)  Budgeted cash payments
C)  Cash repaid
D)  Ending cash balanceE) C) and D)
F) B) and C)

Question 15

Creating a budget is an important part of which phase of the planning and control process?

Accepted Answer

A)  Planning
B)  Organizing
C)  Directing/Leading
D)  ControlE) None of the above
F) All of the above

Question 16

Cedar Co.has forecast purchases to be $330,000 in June,$375,000 in July,$310,000 in August,and $270,000 in September.Purchases average 30% paid in cash,70% are on credit.Credit purchases are paid 60% in the month of purchase,30% during the month following,and 10% the second month following the purchase.Cash disbursements in September would be

Accepted Answer

A)  $113,400.
B)  $204,750.
C)  $261,450.
D)  $285,750.E) A) and B)
F) All of the above

Question 17

A _____________ is the vision of what management wants the organization to achieve over the long term.

Accepted Answer

A)  Strategic plan
B)  Long-term objective
C)  Short-term objective
D)  TacticE) B) and D)
F) B) and C)

Question 18

Which of the following is not a way to reduce the dysfunctional behaviors associated with budgeting?

Accepted Answer

A)  Create budget slack.
B)  Use different budgets for planning and for performance evaluation.
C)  Use a continuous or rolling budget approach.
D)  Use a zero-based budgeting approach.E) A) and D)
F) All of the above

Question 19

Orchard has forecast sales to be $250,000 in February,$270,000 in March,$300,000 in April,and $280,000 in May.The average cost of goods sold is 70% of sales.All sales are made on credit and sales are collected 60% in the month of sale,and 40% the month following.What is the budgeted Accounts Receivable balance on May 31?

Accepted Answer

A)  $196,000
B)  $117,600
C)  $112,000
D)  $168,000E) All of the above
F) B) and C)

Question 20

Participative budgeting is an approach to budgeting that

Accepted Answer

A)  is top-down in nature.
B)  allows top management to set the budget.
C)  discourages budget slack.
D)  is more likely to motivate people to work towards the organization's goals than a top-down approach.E) All of the above
F) B) and D)

Exam 8: Budgetary Planning

Skylark has forecast production for the next three months as follows: July 4,900 units,August 6,600 units,September 7,500 units.Monthly manufacturing overhead is budgeted to be $17,000 plus $6 per unit produced.What is budgeted manufacturing overhead for August?

Correct Answer
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The direct labor budget is based on budgeted sales levels.The direct labor budget is based on budgeted production levels.

Correct Answer
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Correct Answer
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Correct Answer
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A _____________ is the vision of what management wants the organization to achieve over the long term.

Correct Answer
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Correct Answer
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A short-term objective is a specific action managers use to reach their long term goals.A short-term objective is a specific goal that managers need to achieve in no more than a year to reach their long-term goals.

Correct Answer
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Budgeted manufacturing overhead includes indirect manufacturing costs,but not selling or administrative costs.Budgeted manufacturing overhead includes all indirect manufacturing costs such as rent,depreciation on equipment,and utilities.

Correct Answer
verified

Participative budgeting is an approach to budgeting that

Correct Answer
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Creating a budget is an important part of which phase of the planning and control process?

Correct Answer
verified

Correct Answer
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Which component of the cash budget is shown as a line item on the budgeted balance sheet?

Correct Answer
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Which of the following is not a way to reduce the dysfunctional behaviors associated with budgeting?

Correct Answer
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Harney,Inc.has prepared the following budgets for March.In March,budgeted production equals budgeted sales,and raw materials inventory will stay constant.What is budgeted cost of goods sold for March?

Correct Answer
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Correct Answer
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Which of the following is not included in the operating budget?

Correct Answer
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Correct Answer
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Manufacturing firms prepare a separate raw materials purchases budget for each material used in production.Each material should have its own budget.

Correct Answer
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Which of the following is not a source that can be used in preparing the sales budget?

Correct Answer
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Correct Answer
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Exam 8: Budgetary Planning

Skylark has forecast production for the next three months as follows: July 4,900 units,August 6,600 units,September 7,500 units.Monthly manufacturing overhead is budgeted to be $17,000 plus $6 per unit produced.What is budgeted manufacturing overhead for August?

Correct AnswerverifiedShow Answer

The direct labor budget is based on budgeted sales levels.The direct labor budget is based on budgeted production levels.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A _____________ is the vision of what management wants the organization to achieve over the long term.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A short-term objective is a specific action managers use to reach their long term goals.A short-term objective is a specific goal that managers need to achieve in no more than a year to reach their long-term goals.

Correct AnswerverifiedShow Answer

Budgeted manufacturing overhead includes indirect manufacturing costs,but not selling or administrative costs.Budgeted manufacturing overhead includes all indirect manufacturing costs such as rent,depreciation on equipment,and utilities.

Correct AnswerverifiedShow Answer

Participative budgeting is an approach to budgeting that

Correct AnswerverifiedShow Answer

Creating a budget is an important part of which phase of the planning and control process?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which component of the cash budget is shown as a line item on the budgeted balance sheet?

Correct AnswerverifiedShow Answer

Which of the following is not a way to reduce the dysfunctional behaviors associated with budgeting?

Correct AnswerverifiedShow Answer

Harney,Inc.has prepared the following budgets for March.In March,budgeted production equals budgeted sales,and raw materials inventory will stay constant.What is budgeted cost of goods sold for March?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is not included in the operating budget?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Manufacturing firms prepare a separate raw materials purchases budget for each material used in production.Each material should have its own budget.

Correct AnswerverifiedShow Answer

Which of the following is not a source that can be used in preparing the sales budget?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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