0... The document that charts a course of future action for a business by outlining the plans of the business in financial terms is the .................	budget	0. ____
1-3... The objectives of budgeting include:
1... ..............................................................................................		1. ____
2... ..............................................................................................		2. ____
3... ..............................................................................................		3. ____
4... Giving information to employees about their performance relative to the goals they helped establish is called..............................................		4. ____
5... An organizations budgetary unit led by a manager who has both authority over and responsibility for the units performance is a ..........		5. ____
6... The budget becomes less effective as a tool for planning or controlling operations if employees view budget goals as unachievable. This occurs when the budget is set too ...........................................................		6. ____
7... Goquik Taxi Co. establishes its budget at only one level of activity. This type of budget is called...............................................................		7. ____
8... The manager of the shipping department was directed to stay within the departmental budget. To accomplish this goal, the manager stopped shipping to customers for an entire month. This managers behavior is said to exhibit ...........................................................................		8. ____
9... A variation of fiscal-year budgeting that seeks to maintain a continuous twelve-month projection into the future is called a ............................		9. ____
10... When budgets establish lower goals than may be possible, they are said to be padded or contain.............................................................		10. ____
11... Parts Supply Co. prepares its budgets based on 23,000, 24,000, and 25,000 units of production. This type of budgeting is known as ...........		11. ____
12... Manufacturing operations require a series of budgets that are linked together in a .............................................................................		12. ____
1315... The production budgets are used to prepare the following budgets:
13... ..............................................................................................		13. ____
14... ..............................................................................................		14. ____
15... ..............................................................................................		15. ____
16... The starting point in estimating the quantity of sales for each product in the sales budget is ....................................................................		16. ____
17... The budgets that are used by managers to plan the financing, investing, and cash objectives for the firm are...............................................		17. ____
18... The budget that allows management to assess the effects of the individual budgets on profits for the year is the.................................		18. ____
	continued

		For
	Answers	Scoring
19... The budget that summarizes plans for acquiring fixed assets is the......		19. ____
20... The budget that shows expected receipts (inflows) and payments (outflows) of cash for a week, a month, or a longer period is the..........		20. ____

NOTE: Each of the 20 correct answers is assigned a weight of 3%.

PROBLEM 1PROBLEMS40%

INSTRUCTIONS: Solve the following problems and record the answers in the Answers column.

		For
	Answers	Scoring
0... Sales are expected to total 125,000 units, and no inventories are maintained. Production should total ..............................................	125,000 units	0. ____
1... Calculate the units to be produced, based on the following data: .. Estimated units in beginning inventory ........ 87,000 .. Estimated units in ending inventory ............ 89,000 .. Expected units sold ................................ 750,000		1. ____
23... Kian Inc. plans to manufacture 39,200 units of Product D. Product D is produced in Department 1, where 0.25 hour per unit is required for direct labor. Direct labor rates in Department 1 are $14 per hour
2... The hours required in Department 1 to manufacture Product D are .......		2. ____
3... The total direct labor cost to manufacture Product D is ......................	$	3. ____
45... Sammie Co.s accounts receivable on January 1, 2008, total $375,000. Budgeted sales for the first three months of the year are: January February March $550,000 $850,000 $980,000 .. Lisa expects to sell 20% of its merchandise for cash. Of the remaining 80% of the sales on account, 60% is expected to be collected in the month of sale and the remainder in the following month.
4... Calculate Sammies estimated cash receipts for January ..................	$	4. ____
5... Calculate Sammies estimated cash receipts for February .................	$	5. ____
67... Stewart Inc. uses a flexible budgeting system to plan for its manufacturing operations. The static budget for 10,000 units of production provides for direct labor at $10 per unit and variable electricity expense at $0.83 per unit. Fixed costs for the period are electric power $1,750 and supervisor salaries of $23,400.
6... Variable costs for 14,000 units of production are .............................	$	6. ____
7... Fixed costs for 14,000 units of production are .................................	$	7. ____
8... The total department costs for 15,000 units of production are .............	$	8. ____

NOTE: Each of the 8 correct answers is assigned a weight of 5%.