• Question 1

  0 out of 2 points

  

  Which of the following budgets needs to be established first in the budgeting process?

  Selected Answer:	b. The budgeted income statement
  Answers:	a. The production budget
  	b. The budgeted income statement
  	c. The cash budget
  	d. The sales budget

• Question 2

  0 out of 2 points

  

  A benefit of the participative approach to budgeting (relative to the top-down approach) is:

  Selected Answer:	a. In participative budgeting, lower level management has less input on the budget.
  Answers:	a. In participative budgeting, lower level management has less input on the budget.
  	b. Participative budgeting increases managers buy-in and motivation to achieve budget goals.
  	c. Participative budgeting is quicker and easier to administer.
  	d. In participative budgeting, outside community members have more input on the budget.

• Question 3

  2 out of 2 points

  

  What is a flexible budget?

  Selected Answer:	a. All the other answers
  Answers:	a. All the other answers
  	b. The budget used to calculate production variances (price and quantity variances.
  	c. The master budget adjusted to the actual level of sales.
  	d. The budget most appropriate for use in evaluating performance of production supervisors.

• Question 4

  0 out of 2 points

  

  In variance analysis, the standard quantity of direct materials is:

  Selected Answer:	b. The quantity of materials used to create the master budget (based on the expected sales).
  Answers:	a. The quantity of materials actually used in production.
  	b. The quantity of materials used to create the master budget (based on the expected sales).
  	c. The quantity of materials one would expect (based on the standards) to be used for the actual level of sales.
  	d. Established based on ideal standards, including no allowance for waste or spoilage.

• Question 5

  0 out of 2 points

  

  Which of the following is the most likely explanation for an unfavorable direct materials quantity variance?

  Selected Answer:	b. The new purchasing agent was not as effective in negotiating low prices.
  Answers:	a. The government levied new tariffs on the materials purchased.
  	b. The new purchasing agent was not as effective in negotiating low prices.
  	c. Lack of training meant that employees made more mistakes than expected.
  	d. They used higher quality direct materials, which reduced waste (scrap).

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