2nd Mastery

Question 1

Is a process of transforming the planned courses of action into quantitative terms in the form of money.

Answer 1

Budgeting

Question 2

Operational budget

Answer 2

1. Operating Budget
2. Sales Budget
3. Production Budget
4. Ending Inventory Budget
5. Selling and Administrative Budget
6. Pro-forma Financial Statement

Question 3

Basic Steps in Preparing the Budget

Answer 3

1. Projection of the firm’s sales
2. Production cost
3. Inventory level
4. Costs of goods sold
5. Selling and administrative expenses
6. Cash Budget
7. Pro Forma Income Statement
8. Pro Forma Balance Sheet

Question 4

Is the process of estimating the volume of sales.

Answer 4

Sales Forecast

Question 5

Serves as the mother of all the budgets that every subsequent operating and financial budget will rely on.

Answer 5

Sales Forecast

Question 6

Having an inaccurate _____ ________ puts the company in a difficult situation.

Answer 6

sales forecast

Question 7

Refers to the planned volume that the company is expected to sell based on forecasted sales.

Answer 7

Sales Budget

Question 8

Provides a detailed plan of sales during a budget period.

Answer 8

Sales Budget

Question 9

It is where the operating and financial budgets start.

Answer 9

Sales Budget

Question 10

The sales budget is prepared on a monthly, quarterly, semi-annually, or yearly basis

Answer 10

Sales Budget

Question 11

It is prepared as a guide for the target to be achieved and for coordination purposes.

Answer 11

Sales Budget

Question 12

However, in most scenarios, the _____ ______ is subject to adjustment depending on the economic situation.

Answer 12

Sales Budget

Question 13

This budget gives assurance that the units required to produce the sales requirements for each period are met

Answer 13

Production Budget

Question 14

Serves as the basis for getting a budget for the direct materials, direct labor, factory overhead, and other expenses that are directly associated with production.

Answer 14

Production Budget

Question 15

Before preparing a__________ ________, a sales forecast must be finalized.

Answer 15

Production Schedule

Question 16

It is dependent on the sales forecast

Answer 16

Production Schedule

Question 17

Every time a change is made on the sales forecast, the __________ ________ is likewise changed.

Answer 17

Production Schedule

Question 18

Production shows the costs of making a product.

Answer 18

Production Schedule

Question 19

Production shows the costs of making a product. It reflects the following information:

Answer 19

• The number of units and the cost of raw materials
• Direct labor cost
• Manufacturing overhead cost
• Desired inventory level