Question 1

Which of the following budgets is prepared after the cash budget?

Accepted Answer

A)   Sales Budget
B)   Budgeted balance sheet
C)   Capital expenditure budget
D)   Budgeted income statementE) A) and C)
F) B) and C)

Question 2

The unit purchasing requirements for a retail entity are calculated as:

Accepted Answer

A)   forecast sales in units - desired ending inventory in units + beginning inventory in units.
B)   forecast sales in units - desired ending inventory in units - beginning inventory in units.
C)   forecast sales in units + desired ending inventory in units + beginning inventory in units.
D)   forecast sales in units + desired ending inventory in units - beginning inventory in units.E) B) and C)
F) C) and D)

Question 3

Southside Manufacturing is preparing its purchases budget for the 3rd quarter of the year. The following information is given in units.
  Beginning inventory 550 Ending inventory 780 Sales forecast for second quarter 1390\begin{array} { l r } 	ext { Beginning inventory } & 550 \	ext { Ending inventory } & 780 \	ext { Sales forecast for second quarter } & 1390\end{array} Beginning inventory  Ending inventory  Sales forecast for second quarter ​5507801390​ 
How many units should be purchased in the second quarter?

Accepted Answer

A)   1160
B)   1390
C)   1620
D)   unable to calculate from information provided. E) All of the above
F) A) and B)

Question 4

For a budget to be most effective it is best prepared from a:

Accepted Answer

A)   bottom up approach.
B)   top down approach.
C)   middle up approach.
D)   middle down approach.E) B) and D)
F) A) and B)

Question 5

If estimated direct raw materials and direct labour costs are $42 000 in total, what is the direct cost per unit if forecast production is 6000 units?

Accepted Answer

A)   $7
B)   $8
C)   $14
D)   $18E) C) and D)
F) All of the above

Question 6

Which of the following statements is incorrect?

Accepted Answer

A)   A service provider only prepares financial budgets, not operating budgets.
B)   A retailer prepares a budget for purchases and then a cost of sales budget.
C)   Both retailers and manufacturers prepare income, expense, capital expenditure and cash budgets.
D)   A manufacturer prepares a production budget, direct materials, direct labour and factory overhead budgets and then a cost of sales budget.E) A) and B)
F) B) and D) A

Question 7

Which of the following is not part of the control phase of budgeting?

Accepted Answer

A)   Comparing actual performance with budget estimates.
B)   Deciding what action should be taken.
C)   Identifying any significant variances.
D)   Setting goals.E) C) and D)
F) B) and C)

Question 8

The behavioural aspect of budgeting is:

Accepted Answer

A)   unimportant.
B)   very important.
C)   generally important.
D)   only important for some firms.E) None of the above
F) A) and B)

Question 9

Cash receipts information would come from the:

Accepted Answer

A)   sales budget.
B)   direct materials budget.
C)   capital expenditure budget.
D)   direct labour budget.E) B) and D)
F) None of the above

Question 10

Which of these methods is least likely to be used to forecast sales?

Accepted Answer

A)   Field studies by market research staff
B)   Predictions by production employees
C)   Predictions by sales staff
D)   Extrapolation of past salesE) A) and B)
F) A) and C) B

Question 11

Which of the following is not a benefit of budgeting?

Accepted Answer

A)   Motivation
B)   Coordination
C)   Liquidity management
D)   It saves work for management.E) None of the above
F) A) and B)

Question 12

Identify the unfavourable variance.

Accepted Answer

A)   Budgeted expenses $8 000; actual expenses $8 500
B)   Budgeted loss $13 800; actual loss $8 500
C)   Budgeted income $10 000; actual income $15 000
D)   Budgeted expenses $13 000; actual expenses $11 000E) B) and C)
F) A) and D)

Question 13

Which of the following is a typical example of a variable cost?

Accepted Answer

A)   Rent
B)   Depreciation
C)   Cleaning
D)   Sales commissionE) B) and C)
F) A) and C)

Question 14

The sales budget for Jim's Tents for the first three months of the year is expected to be $150 000, $140 000 and $160 000 with 20% of each month's sales being on credit. Collections of accounts receivable are scheduled at 50% during the month of sale, 45% during the month following the sale with 5% uncollectable. The total budgeted cash receipts from sales for the second month will be:

Accepted Answer

A)   $128 000
B)   $139 500
C)   $140 000
D)   $143 000E) A) and D)
F) None of the above

Question 15

Which of the following is not a financial budget?

Accepted Answer

A)   Cash budget
B)   Budgeted balance sheet
C)   Capital expenditure budget
D)   Budgeted income statementE) A) and B)
F) A) and C)

Question 16

An example of a fixed factory overhead cost is:

Accepted Answer

A)   direct labour.
B)   light and power.
C)   council rates and taxes.
D)   indirect materials.E) A) and D)
F) A) and C)

Question 17

For many companies in Australia the average profit margin could be as low as:

Accepted Answer

A)   5%.
B)   10%.
C)   15%.
D)   20%.E) A) and D)
F) All of the above

Question 18

The primary purpose of a budget is to:

Accepted Answer

A)   identify who should be promoted.
B)   show how resources will be acquired and used.
C)   find the cheapest source of supplies and expenses.
D)   identify those employees that are working efficiently and those that are working inefficientlyE) B) and D)
F) A) and B)

Question 19

Which statement relating to the provision of motivation as a benefit of budgeting is not true?

Accepted Answer

A)   An improperly prepared budget may have an adverse effect on motivation.
B)   To increase the chances of acceptance the budget is best approached from the bottom up.
C)   When all levels of management participate in preparing the budget it has a better chance of acceptance.
D)   The budgeted level of performance should be beyond that attainable with a reasonably amount of effort, to provide employees with a challenge.E) B) and D)
F) C) and D)

Question 20

Which of the following account balances is not reported on the balance sheet?

Accepted Answer

A)   Cost of sales
B)   Finished goods inventory
C)   Work in progress inventory
D)   Materials inventoryE) All of the above
F) A) and D) A

Exam 23: Budgeting for Planning and Control

Which of the following budgets is prepared after the cash budget?

Correct Answer
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The unit purchasing requirements for a retail entity are calculated as:

Correct Answer
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Correct Answer
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For a budget to be most effective it is best prepared from a:

Correct Answer
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If estimated direct raw materials and direct labour costs are $42 000 in total, what is the direct cost per unit if forecast production is 6000 units?

Correct Answer
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Which of the following statements is incorrect?

Correct Answer
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A

Which of the following is not part of the control phase of budgeting?

Correct Answer
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The behavioural aspect of budgeting is:

Correct Answer
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Cash receipts information would come from the:

Correct Answer
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Which of these methods is least likely to be used to forecast sales?

Correct Answer
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B

Which of the following is not a benefit of budgeting?

Correct Answer
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Identify the unfavourable variance.

Correct Answer
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Which of the following is a typical example of a variable cost?

Correct Answer
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Correct Answer
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Which of the following is not a financial budget?

Correct Answer
verified

An example of a fixed factory overhead cost is:

Correct Answer
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For many companies in Australia the average profit margin could be as low as:

Correct Answer
verified

The primary purpose of a budget is to:

Correct Answer
verified

Which statement relating to the provision of motivation as a benefit of budgeting is not true?

Correct Answer
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Which of the following account balances is not reported on the balance sheet?

Correct Answer
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A

Exam 23: Budgeting for Planning and Control

Which of the following budgets is prepared after the cash budget?

Correct AnswerverifiedShow Answer

The unit purchasing requirements for a retail entity are calculated as:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

For a budget to be most effective it is best prepared from a:

Correct AnswerverifiedShow Answer

If estimated direct raw materials and direct labour costs are $42 000 in total, what is the direct cost per unit if forecast production is 6000 units?

Correct AnswerverifiedShow Answer

Which of the following statements is incorrect?

Correct AnswerverifiedA

Which of the following is not part of the control phase of budgeting?

Correct AnswerverifiedShow Answer

The behavioural aspect of budgeting is:

Correct AnswerverifiedShow Answer

Cash receipts information would come from the:

Correct AnswerverifiedShow Answer

Which of these methods is least likely to be used to forecast sales?

Correct AnswerverifiedB

Which of the following is not a benefit of budgeting?

Correct AnswerverifiedShow Answer

Identify the unfavourable variance.

Correct AnswerverifiedShow Answer

Which of the following is a typical example of a variable cost?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is not a financial budget?

Correct AnswerverifiedShow Answer

An example of a fixed factory overhead cost is:

Correct AnswerverifiedShow Answer

For many companies in Australia the average profit margin could be as low as:

Correct AnswerverifiedShow Answer

The primary purpose of a budget is to:

Correct AnswerverifiedShow Answer

Which statement relating to the provision of motivation as a benefit of budgeting is not true?

Correct AnswerverifiedShow Answer

Which of the following account balances is not reported on the balance sheet?

Correct AnswerverifiedA

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A

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B

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A