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- 1. Multiple Choice
Few businesses plan to fail, but many of those that don’t succeed have failed to plan
True
False
- 2. Multiple Choice
The master budget reflects the impact of operating decisions, but not financing decisions.
True
False
- 3. Multiple Choice
Budgeting includes only the financial aspects of the plan and not any non financial aspects such as the number of physical units manufactured
True
False
- 4. Multiple Choice
Budgeted financial statements are also referred to as pro forma statements.
True
False
- 5. Multiple Choice
Budgets can play both planning and control roles for management.
True
False
- 6. Multiple Choice
Budgeting is used to help companies:
plan to better satisfy customers
anticipate potential problems
focus on opportunities
All of these answers are correct.
- 7. Multiple Choice
Budgeting provides all of the following EXCEPT:
a means to communicate the organization's short-term goals to its members
support for the management functions of planning and coordination
a means to anticipate problems
an ethical framework for decision making
- 8. Multiple Choice
If initial budgets prove unacceptable, planners achieve the MOST benefit from:
planning again in light of feedback and current conditions
deciding not to budget this year
accepting an unbalanced budget
using last year’s budget
- 9. Multiple Choice
Operating budgets and financial budgets:
combined form the master budget
are prepared before the master budget
are prepared after the master budget
have nothing to do with the master budget
- 10. Multiple Choice
A good budgeting system forces managers to examine the business as they plan, so they can:
detect inaccurate historical records
set specific expectations against which actual results can be compared
complete the budgeting task on time
get promoted for doing a good job
- 11. Multiple Choice
Schultz Company expects to manufacture and sell 30,000 baskets in 20X4 for $6 each. There are 3,000 baskets in beginning finished goods inventory with target ending inventory of 4,000 baskets. The company keeps no work-in-process inventory. What amount of sales revenue will be reported on the 20X4 budgeted income statement?
$174,000
$180,000
&186,000
$204,000
- 12. Multiple Choice
DeArmond Corporation has budgeted sales of 18,000 units, target ending finished goods inventory of 3,000 units, and beginning finished goods inventory of 900 units. How many units should be produced next year?
21,900 units
20,100 units
15,900 units
18,000 units
- 13. Multiple Choice
For next year, Galliart, Inc., has budgeted sales of 60,000 units, target ending finished goods inventory of 3,000 units, and beginning finished goods inventory of 1,800 units. All other inventories are zero. How many units should be produced next year?
58,800 units
60,000 units
61,200 units
64,800 units
- 14. Multiple Choice
Budgeted manufacturing overhead costs include all types of factory expenses EXCEPT:
fixed items such as depreciation of manufacturing machinery
variable items such as plant supplies
indirect labor such as the salary of the plant supervisor
direct labor and direct materials
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