1. Budgeted production depends on: a) the direct manufacturing labor budget b) the manufacturing overhead costs budget c) budgeted sales and expected changes in inventory levels d) the direct materials usage budget and direct material purchases budget

2. Budgeting is used to help companies: a) anticipate potential problems b) plan to better satisfy customers c) focus on opportunities d) All of these answers are correct.

3. If initial budgets prove unacceptable, planners achieve the MOST benefit from: a) deciding not to budget this year b) accepting an unbalanced budget c) planning again in light of feedback and current conditions d) using last year's budget

4. A budget: a) generally includes both financial and nonfinancial aspects of the plan b) All of the above are correct. c) is the quantitative expression of a proposed plan of action by management d) is an aid to coordinate what needs to be done e) serves as a blueprint for the company to follow in an upcoming period

5. Participation of line managers in the budgeting process helps to create: a) greater commitment b) better past performance c) more fraud d) greater anxiety

6. Direct material purchases equal: a) production needs plus beginning inventories b) production needs plus target ending inventories c) production needs d) production needs plus target ending inventories less beginning inventories