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Multiple Choice Quiz
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1
Cuoco Company uses an accounting system that charges costs to the manager who has been delegated the authority to make decisions concerning the costs. For example, if the sales manager accepts a rush order that will result in higher than normal shipping costs, these additional costs are charged to the sales manager because the authority to accept or decline the rush order was given to the sales manager. What term best describes this type of accounting system?
A)Absorption accounting
B)Contribution accounting
C)Operational budgeting
D)Responsibility accounting
2
Experience has shown that 50% of the Needleman Company's sales are for cash. The rest are on credit with 70% of the credit sales collected in the month of sale, 20% in the month following sale, and 5% in the second month following sale. The remaining credit sales are expected to be uncollectible. The company's sales budget for the year included budgeted sales of $140,000 in January, $120,000 in February, and $160,000 in March. What is the total amount of cash receipts budgeted for March?
A)$56,000
B)$136,000
C)$151,500
D)$167,000
3
The management of Nanjiani Company plans to have an inventory at the end of each month equal to 20% of the next month's sales. Budgeted sales in units over the next three months are 80,000 in October, 120,000 in November, and 100,000 in December. What is the budgeted number of units to be produced during November?
A)140,000 units
B)124,000 units
C)116,000 units
D)100,000 units
4
Grosselear Goods, Inc., a merchandiser, plans to sell 48,000 units during the month. If the company has 10,000 units on hand at the start of the month, and plans to have 8,000 units on hand at the end of the month, how many units must be purchased from suppliers during the month?
A)46,000
B)48,000
C)50,000
D)56,000
5
What budget or schedule provides the required data for the preparation of the direct materials budget?
A)Schedule of cash payments
B)Sales budget
C)Production budget
D)Cash budget
6
Brodsky Company has budgeted production for next year as follows.
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Five pounds of raw materials are required for each unit produced. Raw materials on hand at the start of the year total 5,000 pounds. The raw materials inventory at the end of each quarter should equal 10% of the next quarter's production needs. What is the budgeted number of pounds of raw materials to be purchased in the second quarter?
A)320,000
B)248,000
C)132,000
D)49,600
7
Nuber Company makes and sells a single product. Each unit of product requires 5.2 hours of labor at a labor rate of $9.10 per hour. The company needs to prepare a Direct Labor Budget for the second quarter of next year. What is the budgeted direct labor cost per unit of product?
A)$28.00
B)$37.40
C)$41.60
D)$47.32
8
The manufacturing overhead budget at Worthington Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 7,100 direct labor-hours will be required in February. The variable overhead rate is $3.80 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $107,920 per month, which includes depreciation of $16,700. All other fixed manufacturing overhead costs represent current cash flows. What is the budgeted amount of cash disbursements for manufacturing overhead for February?
A)$117,640
B)$118,200
C)$119,400
D)$121,200
9
Bennett Company has a cash balance of $36,000 on April 1. Expected cash receipts during April are $180,000 while expected cash disbursements during the month equal $208,000. The company has a required minimum cash balance of $24,000 at the end of each month. How much will the company need to borrow at the end of April?
A)$8,000
B)$12,000
C)$16,000
D)$28,000
10
Simpson Company makes and sells a single product. Budgeted sales for April are $1,200,000. Gross margin is budgeted at 30% of sales. If the net income for April is budgeted at $160,000, what is the amount of selling and administrative expenses that will be budgeted for the month?
A)$533,332
B)$408,000
C)$312,000
D)$200,000





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