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| 1 | |
Which of the following is not a primary purpose of a budgeting system? |
| | A) | Planning |
| | B) | Facilitating communication and coordination |
| | C) | Allocating resources |
| | D) | Budgeting revenues to exceed expenditures |
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| 2 | |
Which of the following deals primarily with the acquisition of buildings and equipment? |
| | A) | Sales forecasting |
| | B) | Financial budget |
| | C) | Capital budget |
| | D) | Administrative budget |
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| 3 | |
Which of the following outlines how an organization will acquire financial resources during the budget period? |
| | A) | Sales forecast |
| | B) | Financial budget |
| | C) | Capital budget |
| | D) | Rolling budget |
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| 4 | |
Which of the following shows how the organization's financial statements will appear at a specified time if operations proceed according to plan? |
| | A) | Pro forma financial statements |
| | B) | Financial budget |
| | C) | Capital budget |
| | D) | Rolling budget |
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| 5 | |
Which of the following is generally the starting point in the sales forecasting process? |
| | A) | General economic trends |
| | B) | Political and legal events |
| | C) | Market research studies |
| | D) | Sales level of the prior year |
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| 6 | |
Which of the following is not one of the operational budgets? |
| | A) | Direct-material budget |
| | B) | Selling and administrative expense budget |
| | C) | Budgeted income statement |
| | D) | Production budget |
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| 7 | |
Which is the first stage to activity-based budgeting (ABB)? |
| | A) | Specify products or services to be produced and the customers to be served |
| | B) | Identify expected revenues |
| | C) | Identify expected expenditures |
| | D) | Assign costs to services and products produced |
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| 8 | |
What is the major difference between the activity-based costing (ABC) model and the activity-based budgeting (ABB) model? |
| | A) | ABC revolves around costs and ABB revolves around activities |
| | B) | ABC assigns costs to products and ABB forecasts the demand for products |
| | C) | ABC is applicable to service industries and ABB is not applicable to service industries |
| | D) | All of the above are major differences between ABC and ABB |
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| 9 | |
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In which order should you prepare these budgets? |
| | A) | A, B, C, D, E |
| | B) | A, D, B, E, C |
| | C) | A, C, B, D, E |
| | D) | C, A, B, E, D |
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| 10 | |
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The time periods (quarterly) are for the third year of operations. The desired ending inventory is 10% of the budgeted sales units of the next period. How many units will be produced in the first time period, assuming the beginning inventory of the first time period is based on the desired ending inventory of the previous period? |
| | A) | 12,100 |
| | B) | 13,300 |
| | C) | 11,900 |
| | D) | Cannot be determined from the information provided. |
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| 11 | |
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Three units of raw material are required for each unit of finished product. If the company plans to sell 420,000 finished units, how many units of raw material must be acquired to meet the production schedule? |
| | A) | 1,275,000 |
| | B) | 1,305,000 |
| | C) | 1,285,000 |
| | D) | 1,300,000 |
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| 12 | |
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Direct labor of 1/2 hour per unit is required. Direct labor is paid at $15 per hour. What is the total direct-labor cost planned for Period 3? |
| | A) | $250,000 |
| | B) | $750,000 |
| | C) | $375,000 |
| | D) | $125,000 |
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| 13 | |
Of the following budgets illustrated for Cozycamp.com, which is the first that details costs by unit-level, batch-level, product-level, and facility- and general-level costs? |
| | A) | Sales budget |
| | B) | Manufacturing overhead budget |
| | C) | Production budget |
| | D) | Direct-material budget |
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| 14 | |
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In which of the following budgets can expenses be easily categorized in the ABC model of unit-level, customer-level, and facility- and general-level expenses? |
| | A) | Selling, general, and administrative budget |
| | B) | Manufacturing overhead budget |
| | C) | Direct-material budget |
| | D) | Direct-labor budget |
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| 15 | |
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Which of the following is a benefit of utilizing the ABC information in the budgeting process for activity-based budgeting (ABB)? |
| | A) | It reveals how costs will change if the predicted quantities of cost drivers change |
| | B) | Activity-based budgeting can more clearly identify costs that are really variable |
| | C) | It provides solid reasoning for budgeting costs at particular levels |
| | D) | All of the above are benefits of ABB |
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| 16 | |
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Product-level and facility- and general-operations-level costs are fixed costs. One production run is required for every batch of 1,000 units. What is the total budgeted manufacturing overhead when 35,000 units are produced? |
| | A) | $342,500 |
| | B) | $320,000 |
| | C) | $282,500 |
| | D) | $333,750 |
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| 17 | |
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What are the total expenses for a selling, general, and administrative expense budget at a sales-level of 24,000 units? |
| | A) | $346,800 |
| | B) | $291,800 |
| | C) | $230,000 |
| | D) | $300,800 |
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| 18 | |
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The collection schedule is: 70% in the time period of the sales, 25% the following time period, and 5% the third time period after the time period of the sales. What is the amount scheduled to be collected in Period 2? |
| | A) | $ 91,000 |
| | B) | $ 84,000 |
| | C) | $121,000 |
| | D) | $170,000 |
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| 19 | |
The collection schedule is: 60% in the time period of the sales and 40% the following time period. The total credit sales in the current month of September were $80,000. The total collections in September were $102,000. What were the credit sales in August? |
| | A) | $90,000 |
| | B) | $54,000 |
| | C) | $145,000 |
| | D) | $135,000 |
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| 20 | |
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The payment schedule of purchases made on account is: 60% in the time period of purchase, and 40% in the subsequent time period. What amount is scheduled for payment of accounts payable in Period 3? |
| | A) | $42,000 |
| | B) | $30,000 |
| | C) | $50,000 |
| | D) | $ 8,000 |
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| 21 | |
The payment schedule of purchases made on account is: 60% in the time period of purchase, 30% in the following time period, and 10% in the subsequent time period. Total credit purchases were $200,000 in May and $100,000 in June. Total payments on credit purchases were $140,000 in June. What were the credit purchases in the month of April? |
| | A) | $200,000 |
| | B) | $100,000 |
| | C) | Different than for May. |
| | D) | Cannot be determined from the information. |
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| 22 | |
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The organization must maintain a $5,000 cash balance. At the end of a period, automatic deposits (loans) are made to the firm's checking account by the bank for any deficiency. These loans must be repaid the following period. The cash receipts and cash disbursements in the schedule above do not include these loans or the repayment of the loans. Assuming there is no beginning cash balance at Period 1, what will be the amount of the deposit (loan) at the end of Period 3 (ignore interest)? |
| | A) | $ 9,000 |
| | B) | $15,000 |
| | C) | $12,000 |
| | D) | $ 1,000 |
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| 23 | |
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What is the total of the budgeted cost of goods manufactured? |
| | A) | $994,000 |
| | B) | $997,000 |
| | C) | $987,000 |
| | D) | $990,000 |
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| 24 | |
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What is the number of the expected beginning inventory of finished units? |
| | A) | 15,000 |
| | B) | 13,000 |
| | C) | 1,000 |
| | D) | 3,000 |
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| 25 | |
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What is the number of units of raw material to be purchased? |
| | A) | 15,000 |
| | B) | 8,000 |
| | C) | 17,000 |
| | D) | 10,000 |
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| 26 | |
The cash disbursements budget for a manufacturer will not include which of the following? |
| | A) | Budgeted direct-labor expenditures |
| | B) | Budgeted indirect-materials expenditures |
| | C) | Total budgeted manufacturing-overhead expenses |
| | D) | Budgeted supervisory salaries |
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| 27 | |
The budgeted cost of goods manufactured and sold will not include which of the following? |
| | A) | Budgeted direct labor |
| | B) | Total cash disbursements for overhead |
| | C) | Budgeted ending work-in-process inventory |
| | D) | Budgeted ending finished-goods inventory |
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| 28 | |
Which of the following describes the amount shown as the ending balance of cash and cash equivalents on the budgeted statement of cash flows? |
| | A) | It will be equal to the amount of budgeted net income. |
| | B) | It will be equal to the amount of revenue shown on the sales budget. |
| | C) | It will be equal to the budgeted cash flows from operating activities minus investing activities. |
| | D) | It will be equal to the cash balance shown on the budgeted balance sheet. |
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| 29 | |
Which of the following budgeted financial statement is prepared last? |
| | A) | Budgeted income statement |
| | B) | Budgeted balance sheet |
| | C) | Budgeted statement of cash flows |
| | D) | Budgeted statement of retained earnings |
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| 30 | |
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The equation above is an example of which of the following? |
| | A) | A financial planning model. |
| | B) | A model that can be run on a computer to test "what if" questions. |
| | C) | A common management tool. |
| | D) | All of the above. |
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| 31 | |
E-budgeting stands for which of the following? |
| | A) | Electronic |
| | B) | Enterprisewide |
| | C) | Elective |
| | D) | Either (A) or (B) |
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| 32 | |
Zero-base budgeting can be used to develop budgets for which of the following? |
| | A) | States |
| | B) | Industries |
| | C) | Public schools |
| | D) | All of the above |
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| 33 | |
Which of the following include the minimal resources required for the subunit to exist at an absolute minimal level? |
| | A) | Base package |
| | B) | Incremental package |
| | C) | Base budgeting |
| | D) | Zero-base budgeting |
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| 34 | |
Which of the following is one of the phases in a product's life cycle? |
| | A) | Product planning and concept design |
| | B) | Detailed design and testing |
| | C) | Production |
| | D) | All of the above |
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| 35 | |
The educational departments of a university issue 60% of their purchase orders within one week of the cut-off date for incurring encumbrances against their expenditure budgets. Which of the following is a probable cause of this phenomenon? |
| | A) | The department budgets are padded. |
| | B) | There is considerable budgetary slack in the budgets. |
| | C) | There is no incentive to save. |
| | D) | All of the above. |
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| 36 | |
Which term is used when discussing the difference between an individual's submitted budget projection and his or her best estimate of the item being projected? |
| | A) | Budget padding |
| | B) | Budget variance |
| | C) | Budgetary slack. |
| | D) | Participative budgeting |
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