1. Discuss three benefits of allowing lower level managers to participate in the preparation of budgets

1. Discuss one disadvantage of solely relying on lower level managers input in

3.What is the budget or schedule that provides necessary input data for the direct labour budget?

Select one:

a Schedule of cash collections

B Raw materials purchases budget CProduction budget

DCash budget

1. Which of the following is not a reason organizations use budgets? Select one:

• a. Comply with the generally accepted accounting principles
• b. Communicate financial goals of the organization
• C. Allocate resources
• D. Coordinate activities of different departments

1. Budgets are only important for large businesses and not useful for small businesses. Discuss your views regarding this statement

1. Which of the following is NOT an effective way of dealing with a production constraint (i.e., bottleneck)? Select one:a. Reduce the number of detective units produced at the bottleneck b. Pay overtime to workers assigned to the bottlenecK c. Pay overtime to workers assigned to workstations located after the bottleneck in the production process d. Subcontract work that would otherwise require use of the bottleneck

1. What should a firm faced with a production constraint do to maximize total contribution margin?

Select one:

a.

Promote those products having the highest unit contribution margins

b.

Promote those products having the highest contribution margin ratios.

promote those products having the

highest contribution margins and contribution margin ratios.

d.

Promote those products having the highest contribution margin per unit of constrained resource.

1. Which of the following is NOT an effective way of dealing with a production constraint (i.e., bottleneck)?

select one'

O a. Reduce the number of defective units produced at the bottleneck

O D. Pay overtime to workers assigned to the bottleneck

O c. Pay overtime to workers assigned to workstations located after the bottleneck in the production process

O d. Subcontract work that would otherwise require use of the bottleneck.

1. There are various budgets within the master budget. One of these budgets is the productior

Select one

O a. It is calculated based on the sales budget. the desired ending inventorv and beginning inventor

B it details the required direct labour hours

C It details the required raw materials purchases

D it summarizes the costs of producing units for the budget period

Products A, B, and C are produced from a single raw material input The raw materlal costs are $90,000, from which 5,000 units of A, 10,000 units of B, and 15,000 units of C can be produced each period.

Product A can be sold at the split-off point for. $2 per unit, or.it can be processed further at a cost of $12,500 and then sold for $5 per unit.

What is the correct course of action regarding Product A?

Select one:

a.It should be processed further, since this will increase profits by 52,500 each period.

b. It should be processed further. since this will increase profits by $12.500 each period.

C. It should be sold at the spilt-off point, since further processing Will result in a loss of $2.500 each perod.

D.It should be sold at the split-off point, since

Consider a decision facing a firm of either accepting or rejecting a special offer for one of its products. Which of the following costs is NOT relevant?

Select one:

A Direct materials.

b. Fixed overhead that will be avolded if the special offer is

accepted.

C. Variable overhead.

dCommon fixed overhead that will continue if the special offer is

NOT accepted.

Which of the following best describes a typical participative budget?

Select one:

.

It is subject to review by higher levels of management in order to prevent the budgets from becoming too loose

O b. It is NOT critical to the success of a budgeting program

O c. It is NOT subject to review by higher levels of management

except in specific cases where the input of higher management is required

It is NOT subject to review by higher levels of management

since to do so would contradict the participative aspect of the budgeting processing