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1. Which of the following is FALSE regarding the budgeting system? A. The budgeting system aims to communicate management's plans throughout the entire organization. B.

1. Which of the following is FALSE regarding the budgeting system?

A.

The budgeting system aims to communicate management's plans throughout the entire organization.

B.

The budgeting system generates a detailed qualitative plan for acquiring and using financial and other resources over a specified forthcoming time period.

C.

The budgeting system provides a means of allocating resources to those parts of the organization where they can be used most effectively.

D.

The budgeting system helps managers uncover potential bottlenecks before they occur.

2. XYZ Co. produces a part used in the manufacture of one of its products. The unit product cost is $30, computed as follows:

Direct materials, direct labor, and variable overhead

$22

Fixed overhead

$8

Total

$30

An outside supplier has offered to provide the parts for only $25 each. The company estimates that 25% of the fixed manufacturing overhead cost above could be eliminated if the parts are purchased from the outside supplier. Based on these data, the per-unit dollar advantage or disadvantage of purchasing from the outside supplier would be:

A.

$3 disadvantage

B.

$1 advantage

C.

$1 disadvantage

D.

$3 advantage

3. XYZ Co.s expected sales for upcoming months are as follows:

Sales revenue

June........................

$60,000

July........................

$80,000

August....................

$100,000

All sales are on credit. Suppose XYZ collects 60% of credit sales in the current month, and collects 40% in the following month. What is the balance of the companys accounts receivable at the end of July?

A.

$40,000

B.

$32,000

C.

$24,000

D.

$48,000

4.

XYZ Co. keeps careful track of the time required to fill orders. Data concerning a particular order appear below:

Hours

Wait time

24

Process time

3

Inspection time

2

Move time

5

Queue time

6

The companys manufacturing cycle efficiency for the order can be calculated as:

A.

12.5%

B.

7.5%

C.

18.75%

D.

31.25%

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