1. For a company that sells only one product, when the activity measure is the number of units sold, the revenue variance on its flexible budget performance report is favorable if:

a.            the average actual selling price per unit is greater than expected

b.            the number of units sold is greater than expected

c.             Both a. and b.

d.            Either a. or b.

2. Katen Industries. is working on its cash budget for March. The budgeted beginning cash balance is $47,000. Budgeted cash receipts total $182,000 and budgeted cash disbursements total $208,000. How much must Katen borrow if it has a policy requiring that the minimum ending cash balance each month is $40,000?

a.            $26,000

b.            $7,000

c.             $0

d.            $19,000

3. Budgeting which begins with the work of local area managers and includes the cooperation of managers at all levels in setting budget targets is called:

a.            Standard budgeting.

b.            Mandated budgeting.

c.             Top-down budgeting.

d.            Bottom-up budgeting.

 

4. Groover Industries is budgeting its balance sheet for 2020 and has budgeted net income for 2020 of $172,000. If Walker plans to pay dividends of $80,000 during 2020 and budgeted the 2020 beginning balance of retained earnings at $217,000, the budgeted balance in retained earnings for the end of the year should be:

a.            $172,000.

b.            $252,000.

c.             $309,000.

d.            $280,000.