 |
| 1.
| |
Which of the following is not a benefit of budgeting? |
| | A) | It promotes study, research, and a focus on the future |
| | B) | It is a source of motivation |
| | C) | It will prevent net losses from occurring |
| | D) | It is a means of coordinating business activities |
|
|
|
| 2.
| |
Which is not a responsibility of the budget committee? |
| | A) | Providing central guidance |
| | B) | Providing continued communication of the budget to the organization |
| | C) | Rejecting department budgets that do not reflect realistic amounts |
| | D) | Preparation and development of department budgets |
|
|
|
| 3.
| |
In which type of budgets is a budget period added as one budget period elapses? |
| | A) | Financial budgets |
| | B) | Rolling budgets |
| | C) | Production budgets |
| | D) | Selling and administrative expense budgets |
|
|
|
| 4.
| |
Which of the following budgets is normally prepared first? |
| | A) | Cash budget |
| | B) | Sales budget |
| | C) | Merchandise purchases budget |
| | D) | Selling expense budget |
|
|
|
| 5.
| |
The following projections have been made:- Cash sales, $380,000.
- Beginning cash balance, $30,000.
- Operating expenses of $420,000, including depreciation of $20,000
- Interest expense of $12,000 is included in operating expenses
- Borrowing, $50,000.
- End-of-period accrued liabilities of $20,000 for operating expenses.
What is the projected ending cash balance? |
| | A) | $80,000 |
| | B) | $40,000 |
| | C) | $52,000 |
| | D) | $48,000 |
|
|
|
| 6.
| |
| Sales Budget | | Month | October | November | December | January | | Credit Sales | $40,000 | $50,000 | $60,000 | $35,000 |
Expected cash collection pattern is 50% in the month of sale, 30% in the following month, and 15% in the second following month. Five percent of the credit sales are uncollectible. December collections will be: |
| | A) | $35,000 |
| | B) | $51,000 |
| | C) | $54,000 |
| | D) | $50,000 |
|
|
|
| 7.
| |
| Sales Budget | | Month | October | November | December | January | | Credit Sales | $40,000 | $50,000 | $60,000 | $35,000 |
Expected cash collection pattern is 50% in the month of sale, 30% in the following month, and 15% in the second following month. Five percent of the credit sales are uncollectible. November collections were $46,000. September sales were: |
| | A) | $45,000 |
| | B) | $60,000 |
| | C) | $50,000 |
| | D) | $55,000 |
|
|
|
| 8.
| |
Which of the following statements is true? |
| | A) | Budgeted bal. sheets are not dependent upon budgeted inc. statements |
| | B) | Budgeted income statements include amortization expenses |
| | C) | Cash budgets include amortization expenses |
| | D) | Production bushows the cost of the raw material to be purchased |
|
|
|
| 9.
| |
Which of the following budgets is prepared last? |
| | A) | Budgeted income statement |
| | B) | Capital expenditures budget |
| | C) | Manufacturing budget |
| | D) | Budgeted balance sheet |
|
|
|
| 10.
| |
A manufacturing firm would not have need for which of the following budgets? |
| | A) | Sales budget |
| | B) | Production budget |
| | C) | Cash budget |
| | D) | Merchandise purchases budget |
|
|
|
| 11.
| |
| Production Budget | | 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | | Expected sales | 7,000 | 5,000 | 8,000 | 6,000 | | Units produced | 6,800 | ———To be determined——— |
The previous year's 4th quarter ending inventory of 700 units meets the minimum requirement. The expected production in the current 2nd Quarter is: |
| | A) | 5,300 units |
| | B) | 6,800 units |
| | C) | 4,500 units |
| | D) | 5,000 units |
|
|
|
| 12.
| |
| Time Period | 1st Quarter | 2nd Quarter | 3rd Quarter | | Beginning finished goods (units) | 5,000 | 4,000 | 12,000 | | Projected sales units | 50,000 | 40,000 | 120,000 | | Desired ending finished goods (units) | 4,000 | 12,000 | 15,000 | | Direct labour completes 2 units per hour at $8 per hour. |
Which of the following statements is false? |
| | A) | Direct labour hours for the 3rd quarter will be 66,000 |
| | B) | Direct labour cost for the 4th quarter cannot be determined |
| | C) | Direct labour cost for the 2nd quarter will be $192,000 |
| | D) | 150,000 sales units are projected for the 4th quarter |
|
|
|
| 13.
| |
| Budgeted production (units) | 9,000 | 10,000 | 8,500 | | Labour requirements per unit (hours) | 1.5 | 1.5 | 1.5 | | Total labour hours needed | 13,500 | 15,000 | 12,750 | | Total labour dollars | 60,750 | 72,000 | 61,200 |
The labour rate per hour: |
| | A) | remained constant over the budgeted production |
| | B) | decreased over the budgeted production |
| | C) | increased over the budgeted production |
| | D) | cannot be determined from the information provided |
|
|
|
| 14.
| |
| Time period | 1st qtr | 2nd qtr | | Budgeted units of production | 7,000 | 7,500 | | Budgeted variable overhead costs | 15,000 | 18,750 | | Budgeted fixed overhead costs | ? | ? | | Budgeted amortization included in total overhead | 3,000 | 3,000 | | Budgeted cash disbursements for total overhead | 20,000 | 23,750 |
All budgeted overhead costs, except for budgeted fixed overhead, are shown. What is the amount of budgeted fixed overhead? |
| | A) | $8,000 |
| | B) | $6,000 |
| | C) | $9,000 |
| | D) | $3,000 |
|
|
|
| 15.
| |
In preparing a merchandise purchases budget, the following information is available: budgeted beginning inventory 820 units, budgeted sales 1,560 units, budgeted ending inventory 980 units. What is the number of units to be purchased? |
| | A) | 1400 units |
| | B) | 1720 units |
| | C) | 2380 units |
| | D) | 2540 units |
|
|
|
| 16.
| |
Which of the following is NOT included in the cash budget? |
| | A) | Repayment of bank loan |
| | B) | Interest expense |
| | C) | Amortization expense |
| | D) | Purchase of equipment |
|
|
|
| 17.
| |
Which of the following is NOT a benefit of zero-based budgeting? |
| | A) | The expense planning requires managers to justify the amounts budgeted for each activity. |
| | B) | It is typically time consuming and can be costly. |
| | C) | The managers need to prepare decision packages and they are required to rank each request in terms of importance. |
| | D) | Zero-based budgeting can be used if there is no historical data available as a base. |
|
|
|
| 18.
| |
A manufacturing firm must prepare which of the following budget(s)? |
| | A) | The direct materials budget |
| | B) | The direct labour budget |
| | C) | The manufacturing overhead budget |
| | D) | All of the above |
|
|
.