Chapter 24

Question 1

Which out of the order that the master budget is completed?
____ Production
____Manufacturing Costs
____Sales Budget

Answer 1

1. Sales Budget
2. Production Budget
3. Manufacturing Costs (DM,DL,MOH) Budget

Question 2

What is the remaining order to follow the master budget?
______ Sell. & Admin. Costs budget
______ Pro Forma Financial Statements
_____Cash Budget

Answer 2

4. Sell. & Admin. Cost Budget
5. Pro Forma Financial statements
6. Cash Budget

Question 3

A formal written statement of management’s plans for a specified furture time period, expressed in financial terms.
a. cash budget
b. budget
c. sales forcast

Answer 3

Budget

Question 4

The amount by which a manager intentionally underestimates budgeted revenue or overestimates budgeted expenses in order to make it easier to achieve budgetary goals.
a. master budget
b. operating budgets
c. budgetary slack

Answer 4

Budgetary slack

Question 5

A projection of anticipated cash flows.
a. sales forecast
b. operating budgets
c. cash budget

Answer 5

Cash Budget

Question 6

Individual budgets that focus primarily on the cash resources needed to fund expected operations and planned capital expenditures.
a. Master Budget
b. Participative Budgets
c. Financial Budges

Answer 6

Financial Budgets

Question 7

A set of interrelated budgets that constitutes a plan of action for a specific time period.
a. Budget
b. Sales forecast
c. Master Budget

Answer 7

Master Budget

Question 8

Individual budgets that result in a budgeted income statement.
a. Cash Budget
b. Master Budget
c. Operating Budgets

Answer 8

Operating Budgets

Question 9

A budgetary approach that starts with input from lower-level managers and works upward so that managers at all levels contribute.
a. Financial budgets
b. Budgetary slack
c. Participative budgets

Answer 9

Participative budgets

Question 10

The projection of potential sales for the industry and the company’s expected share of such sales.
a. master budget
b. sales forecast
c. participation budgets

Answer 10

sales forecast

Question 11

how to calculate budgeted sales

Answer 11

forecasted unit sales x unit selling price

Question 12

how to calculation budgeted production requirements for two months

Answer 12

forecasted unit sales + desired ending inventory - beginning inventory

Question 13

how to calculate budgeted manufacturing costs for two months

Answer 13

(budgeted production x variable manufacturing costs per unit) + fixed manufacturing costs

Question 14

how to calculate cash payments for manufacturing costs for two months

Answer 14

total manufacturing costs - manufacturing depreciation expense

Question 15

how to calculate total budgeted selling and administrative costs for 2 months

Answer 15

(forecasted unit sales x unit variable S&A costs) + fixed S&A costs

Question 16

how to calculate total budgeted cash payments for selling and administrative costs for 2 months

Answer 16

total selling and administrative costs - selling and administrative depreciation expense

Question 17

how to calculate available cash for 2 months

Answer 17

beginning cash + cash collections from customers - cash payments for manufacturing and S&A costs

Question 18

how to calculate financing (if necessary)

Answer 18

available cash - required minimum cash balance