12) Costs such as supervision, depreciation, maintenance, supplies, and power. are included in the ________. A) capital expenditures budget B) distribution costs budget C) revenues budget D) manufacturing overhead budget

13) High inventory levels increase the ________. A) cost of carrying inventory, the costs of quality, and shrinkage costs B) revenues and expected profits C) cost of equity, cost of debt, and cost of short-term funds D) cost of materials, the costs of overhead, and opportunity costs

14) The revenues budget identifies ________. A) expected cash flows for each product B) actual sales from last year for each product C) the expected level of sales for the company D) the variance of sales from actual for each product

15) The number of units in the sales budget and the production budget may differ because of a change in ________. A) finished goods inventory levels B) overhead charges C) direct material inventory levels D) sales returns and allowances 16) Which of the following is a benefit of keeping inventory levels low? A) It reduces setup costs. B) It reduces shrinkage costs. C) It reduces the loss from lost sales. D) It reduces inventory turnover.

17) Budgeted production equals ________. A) beginning finished goods inventory + budgeted unit sales - targeted ending finished goods inventory B) targeted ending finished goods inventory + beginning finished goods inventory - budgeted unit sales C) budgeted unit sales + targeted ending finished goods inventory - beginning finished goods inventory D) budgeted unit sales + targeted ending finished goods inventory + beginning finished goods inventory

18) Best products, an Atlanta based company, is in the midst of its budgeting process. It has already prepared its direct materials usage budget and is now in the process of preparing its direct material purchase budget. In addition to the details gathered to prepare the direct materials usage budget, Best also must know ________. A) the level of direct material inventory to be maintained B) the ratio of direct materials to cost of goods sold C) the beginning direct materials inventory level D) the quantity of direct materials to be purchased

19) Total finished units to be produced is based on the ________. A) direct material purchase budget B) budgeted sales units C) direct material usage budget D) budgeted manufacturing overhead 20) Which of the following is most likely to be a cost driver for the variable portion of marketing costs? A) percentage of markup on cost B) number of units produced C) increase in revenues attributable to such marketing D) number of units units sold

21) In using the net present value method, only projects with a zero or positive net present value are acceptable because ________. A) the return from these projects equals or exceeds the cost of capital B) a positive net present value on a particular project guarantees company profitability C) the company will be able to pay the necessary payments on any loans secured to finance the project D) it results in high payback period

22) Which of the following is also called required rate of return? A) hurdle rate B) total cost rate C) variance rate D) predetermined overhead rate