1. Where in the budget would additional steel for widgets be found?

1. Direct materials budget
2. Custodial budget
3. Sales budget
4. Advertising budget

2. What is a direct materials budget?

1. Money that is allotted for mailing out samples of a product.
2. Money that is set aside for the research of new materials to be used in the manufacturing process.
3. An overall budget for the calendar year for a specific company.
4. Statement that shows how much material must be purchased in a specific time period to meet the needs of the company.

3. Is the procurement department impacted by the direct materials budget?

1. There is no data supporting a correlation between the direct materials budget and the procurement department.
2. Sometimes, but mostly the buyers know what to do.
3. No, the buyers can simply guess what is needed from the previous order.
4. Yes, the buyers need to know what and how much to purchase.

4. Do most companies know their exact direct materials cost?

1. Most companies usually use an estimation of their direct materials cost.
2. Knowing the direct materials cost is not important for a company.
3. Most companies have an entire division devoted to finding the direct materials cost.
4. Companies MUST know their exact direct materials cost.

5. What other budget is directly impacted by the direct materials budget?

1. The maintenance budget
2. The advertising budget
3. The marketing budget
4. The master budget

6. How often should the production budget be done?

1. Weekly
2. Quarterly or monthly
3. Annually
4. Biannually

7. What can go wrong with a production budget?

1. None of these answers are correct.
2. A production budget really isn't that important, and nothing will be affected if it is wrong.
3. You could make a commercial for the wrong product.
4. A company could skew other budgets because of a problem with the production budget.

8. What other budget works with the production budget to provide guidance for a company's goals, and is used to prepare the production budget?

1. Overhead budget
2. Sales budget
3. Advertising budget
4. Accounting budget

9. What is a production budget?

1. A guide to how much a company needs to produce to meet its sales goals
2. A guide to how much a company needs to make, money wise, in a given quarter.
3. A guide to how much it will cost for the company to make its sales commercials for television
4. A guide to how much each company needs to pay its employees in bonuses every year

10. What is needed to get the inventory amount for the production budget?

1. Inventory report
2. Labor budget
3. Sales budget
4. Warehouse manager

11. Which of these is NOT a factor in the direct labor budget?

1. Time per unit produced
2. Total units required
3. Electricity costs
4. Cost per labor hour

12. Which of these shows how to calculate direct labor cost?

1. Unit cost times materials cost
2. Unit cost in time times labor cost per unit
3. Labor cost per unit times total units required
4. Unit cost in time times labor cost per hour times total units required

13. From which report is the total number of units required taken?

1. It doesn't come from a budget
2. Production budget
3. Direct materials budget
4. Sales budget

14. How does HR make use of the direct labor budget?

1. Amount to budget for payment
2. HR has no need for the direct labor budget
3. Amount of time needed per worker
4. Staffing needs

15. Which of these does NOT feature work from the direct labor budget?

1. Budgeted income statement
2. Balance sheet
3. Direct materials budget
4. Master budget

16. For this manufacturing overhead budget, which cost increased in quarter 4?

Cost Type	Quarter 1	Quarter 2	Quarter 3	Quarter 4
Employee costs	$30,000	$30,000	$30,000	$30,000
Depreciation	$5,000	$5,000	$5,000	$5,000
Freight	$8,000	$8,000	$8,000	$8,000
Rent	$40,000	$40,000	$40,000	$40,000
Utilities	$14,500	$14,500	$14,500	$24,500
Maintenance Costs	$1,500	$1,500	$1,500	$1,500
TOTALS:	$99,000	$99,000	$99,000	$109,500

1. Rent
2. Utilities
3. Maintenance costs
4. Employee costs

17. Manufacturing overhead budgets are usually calculated per quarter or over what other time span?

1. per year
2. per week
3. per day
4. per month

18. Which of the following pieces of information is needed to complete a manufacturing overhead budget?

1. Rent for manufacturing facility
2. Employee costs to make finished goods
3. Retail store costs
4. Materials cost

19. Which of the following budgets is the manufacturing overhead budget a part of?

1. The retail store budget
2. The master budget
3. The tax preparation budget
4. The marketing budget

20. Which of the following is NOT included in the manufacturing overhead budget?

1. Depreciation
2. Utilities
3. Materials
4. Rent