A 43 1 1 1 B Chapter 6 - Master Budget and Responsibility Accounting 1 Which of the following is TRUE of a budget? A) Budgets are used to express only the operational plans and not the strategic plans of a B) Budgets do not account for nonfinancial aspects of the upcoming period. C) Budgets are most useful when they are planned independently of the company's strategic plans. D) Budgets help managers to revise their plans and strategies. 2 3 Which of the following is a financial budget? A) budgeted balance sheet B) cash receivables budget C) production budget D) cost of goods sold budget A master budget A) includes only financial aspects of a plan and excludes nonfinancial aspects. B) is an aid to coordinating what needs to be done to implement a plan. C) includes broad expectations and visionary results. D) should not be altered after it has been agreed upon. E) is based upon budget constraints outside of management control. D space provided for each question below

4 Budgets are advantageous because they A) compel planning that includes the implementation of plans, provide performance criteria, and promote goodwill. B) provide performance criteria, promote goodwill, and save money. C) compel planning that includes the implementation of plans, provide performance criteria, and promote communication and coordination within the organization. D) compel planning that includes the implementation of plans, require organizing, and ensure controlling. 5f ensure that the organization meets its goals. 5 Long-run planning (strategic plans) involves the preparation of the A) operating budget. B) cash budget. C) budget standards. D) profit plan. E) capital budget. 6 The operating budget process generally concludes with the preparation of the A) production budget B) cash flow statement C) balance sheet D) budgeted income statement Unit sales of Product 1 are currently 20,000, while unit sales of Product 2 are currently double 7 those of Product 1. What will the company's sales forecast be assuming sales of Product 1 increase by 10 percent and those of Product 2 go up by 8,000 units from the current level? A) 20,000 and 40,000 units, respectively B) 22,000 and 44,000 units, respectively C) 22,000 and 46,000 units, respectively iy 76,000 units E) 22,000 and 48,000 units, respectively For next year Flexsteel Company has budgeted sales of 40,000 units, target ending finished 8 goods inventory of 2,000 units, and a beginning finished goods inventory of 1,200 units. All other inventories are zero. How many units should be produced? A) 39,200 units B) 40,000 units C) 41,800 units D) 42,800 units E) 40,800 units 110 Responsibility accounting is a system that A) deais mainly with revenues. B) requires subdividing all management levels. C) is most appropriate at the top levels of the organization. D) is closely tied to the master budget. E) measures the plans and actions of responsibility centres