1) If management takes a multiple-year view in the decision model and judges success according to the current year's results, a problem will occur in the ________. A) decision model B) performance evaluation model C) production evaluation model D) quantitative model

2) ________ is relevant in a decision to replace equipment. A) Warehouse rent costs B) Book value of old equipment C) Accumulated depreciation on old equipment D) Salvage value

3) Which of the following is true in a decision to keep or replace existing equipment? A) The book value of the old equipment is relevant. B) The disposal value of the old equipment is relevant. C) Property taxes is relevant. D) Depreciation on the new equipment is relevant.

4) A company decided to replace an old machine with a new machine. Which of the following is considered a relevant cost? A) the book value of the old equipment B) the depreciation expense on the old equipment C) the loss on the disposal of the old equipment D) the setup cost of the new equipment 5) What role does a trade-in allowance on old equipment play in a decision to retain or replace equipment? A) It is relevant since it increases the cost of the new equipment. B) It is irrelevant since it reduces the cost of the old equipment. C) It is irrelevant to the decision since it does not impact the cost of the new equipment. D) It is relevant since it reduces the cost of the new equipment.

6) ________ include a budgeted statement of cash flows and a budgeted balance sheet. A) Revenue budgets B) Financial budgets C) Operating budgets D) Production budgets 7) The order to follow when preparing the operating budget is ________. A) revenues budget, production budget, and direct manufacturing labor costs budget B) costs of goods sold budget, production budget, and cash budget C) revenues budget, manufacturing overhead costs budget, and production budget D) cash expenditures budget, revenues budget, and production budget

8) In which order are the following developed? First to last:

A = Production budget B = Direct materials costs budget C = Budgeted income statement D = Revenues budget A) ABDC B) DABC C) DCAB D) CABD

9) The budgeting process is most strongly influenced by ________. A) the capital budget B) the budgeted statement of cash flows C) the sales forecast D) the production budget

10) ________ is the usual starting point for budgeting. A) The revenues budget B) The estimated net income C) The production budget D) The cash budget 11) The sales forecast should be primarily based on ________. A) statistical analysis B) input from sales managers and sales representatives C) production capacity D) input from the board of directors