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| 1 | |
Which one of the following is NOT listed as an attribute of a budget? |
| | A) | The budget is an organization's operating plan for an upcoming period. |
| | B) | The budget is a motivating device. |
| | C) | The budget is a backward-focused control device. |
| | D) | The budget is a guideline for operations. |
| | E) | The budget is a basis for performance evaluation. |
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| 2 | |
__________ is a plan that identifies sources and uses of funds for budgeted operations to achieve the expected operating results for the period. |
| | A) | financial budget. |
| | B) | operating budget. |
| | C) | continuous budget. |
| | D) | capital budget. |
| | E) | master budget. |
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| 3 | |
Which one of the following is an external factor that would need to be considered in forming an initial budget proposal? |
| | A) | changes in product design |
| | B) | introduction of a new product |
| | C) | changes in product mix |
| | D) | competitors' actions |
| | E) | adoption of a new manufacturing process |
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| 4 | |
Miller Company has the policy of maintaining 30% of the next month's projected sales on hand at the end of the current month. Projected sales for Product A in February, March, and April are 40,000 units, 48,000 units, and 80,000 units, respectively. Each unit costs $3 and can be sold for $5 after packaging.
How many units must be purchased in March? |
| | A) | 14,400 |
| | B) | 24,000 |
| | C) | 42,400 |
| | D) | 48,000 |
| | E) | 57,600 |
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| 5 | |
Miller Company has the policy of maintaining 30% of the next month's projected sales on hand at the end of the current month. Projected sales for Product A in February, March, and April are 40,000 units, 48,000 units, and 80,000 units, respectively. Each unit costs $3 and can be sold for $5 after packaging.
What is the amount of inventory that will be reported on the budgeted balance sheet for March 31? |
| | A) | $14,400 |
| | B) | $24,000 |
| | C) | $43,200 |
| | D) | $72,000 |
| | E) | $48,000 |
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| 6 | |
Bert Corporation expects the following credit sales for the first four months of the year: January, $40,000; February, $60,000; March, $80,000; April, $100,000. Experience has shown that payment for the credit sales is received as follows: 40% in the month of sale, 30% in the first month after sale, 20% in the second month after sale, and 10% is uncollectible. How much cash can Bert Corporation expect to collect in March as a result of credit sales? |
| | A) | $32,000 |
| | B) | $50,000 |
| | C) | $58,000 |
| | D) | $74,000 |
| | E) | $100,000 |
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| 7 | |
Fritz Company has $40,000 cash at the beginning of March and anticipates $112,000 in cash receipts and $130,000 in cash disbursements. Fritz Company desires to maintain a cash balance of $40,000 at the end of each month. The company has an agreement with its bank to borrow or repay funds necessary to maintain the required ending balance. As of February 28, the company owes $48,000 to the bank. The balance of the bank loan on March 31 will be: |
| | A) | $30,000 |
| | B) | $50,000 |
| | C) | $58,000 |
| | D) | $66,000 |
| | E) | $70,000 |
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| 8 | |
Fifth Avenue expects its September sales to be $600,000, which is 25% higher than its August sales. Purchases were $400,000 in August and are expected to be $480,000 in September. All sales are on credit and are collected as follows: 80% in the month of the sale and 20% in the following month. All payments in the month of sales are given 2% discount. Sixty percent of purchases are paid in the month of purchase to take advantage of purchase term of 1/10, n/40. The remaining amount is paid in the following month. The beginning cash balance on September 1 is $40,000. The estimated ending cash balance on September 30 would be: |
| | A) | $128,320 |
| | B) | $146,000 |
| | C) | $161,280 |
| | D) | $170,880 |
| | E) | $173,760 |
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| 9 | |
Which one of the following is a schedule showing expected sales in units at their expected selling prices? |
| | A) | direct materials usage budget |
| | B) | sales budget |
| | C) | direct labor budget |
| | D) | production budget |
| | E) | sales forecast |
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| 10 | |
A production plan for an upcoming period should be based on: |
| | A) | a sales forecast adjusted for projected inventory levels |
| | B) | economic order quantities and reorder points |
| | C) | exponential smoothing models |
| | D) | linear regression analysis |
| | E) | learning-curve analysis |
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| 11 | |
__________ is a budgeting process based on activities and cost drivers of operations. |
| | A) | Activity-based management (ABM) |
| | B) | Zero-based budgeting (ZBB) |
| | C) | Kaizen budgeting |
| | D) | Activity-based budgeting (ABB) |
| | E) | None of the above |
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| 12 | |
Which one of the following is a budgeting process that starts with the budgeted output and segregates costs? |
| | A) | flexible budgeting |
| | B) | volume-based budgeting |
| | C) | Kaizen budgeting |
| | D) | Activity-based budgeting |
| | E) | zero-based budgeting (ZBB) |
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| 13 | |
The online architecture of most integrated budgeting and planning programs ____________. |
| | A) | make it easy to involve more people in the budgeting and planning process. |
| | B) | provide instant feedback. |
| | C) | allow constant updates. |
| | D) | All of the above are true statements. |
| | E) | Only a and b are true statements. |
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| 14 | |
Which one of the following is also known as "padding the budget"? |
| | A) | Goal congruence |
| | B) | Kaizen budgeting |
| | C) | Budgetary slack |
| | D) | Participative budgeting |
| | E) | None of the above |
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| 15 | |
An important management tool for budgeting and performance evaluation to achieve desired goals is: |
| | A) | formal systems. |
| | B) | zero-based budgeting (ZBB). |
| | C) | goal congruence. |
| | D) | gaming the performance indicator. |
| | E) | budget slack. |
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