2.Which of the following is not necessary for budgets to be effective?

Multiple Choice

• Goals reflected in a budget should be challenging but attainable.
• Employees affected by a budget should help prepare it.
• Evaluations offer opportunities to explain differences between actual and budgeted amounts.
• Managers must be aware of potential negative outcomes of budgeting, such as budgetary slack.
• All budgeted amounts must be spent to ensure that budgets aren't reduced for the next period.

3.Which of the following is not a step in the budgetary control process?

Multiple Choice

Establish new objectives and a new budget.

Communicate differences to supervisors to facilitate promotion decisions.

Take corrective and strategic actions.

Compare actual results to budgeted amounts and analyze differences.

Develop the budget from planned objectives.

4.

The usual budget period for most companies is:

Multiple Choice

An annual period separated into quarterly and monthly budgets.

An annual period separated into weekly budgets.

A quarterly period separated into weekly budgets.

A monthly period separated into daily budgets.

An annual period of 250 working days.

6.The master budgeting process begins with the:

Multiple Choice

• Direct materials budget.
• Sales budget.
• Production budget.
• Direct labor budget.
• Factory overhead budget.

7.Property taxes, office expenses, and insurance and depreciation on nonmanufacturing assets are included in the:

Multiple Choice

Selling expense budget.

Overhead budget.

Cash payments budget.

Sales budget.

General and administrative expense budget.