Question 1 (1 point)

Bottom-up budgeting is an approach that ________

a	is top-down in nature
b	requires top executives to establish the budget
c	eliminates budgetary slack
d	is more likely to motivate people to work towards the organization's goals than a budget that is imposed

Question 2 (1 point)

The control activity with respect to budgeting is completed when ________.

a	budget amounts from the prior year are compared to the budget amounts for the current year
b	actual amounts from the prior year are compared to the actual amounts for the current year
c	budgeted amounts are compared to actual results
d	none of the above

Question 3 (1 point)

A characteristic of controllability is that it ________.

a	is always clear-cut as to who has responsibility for a cost
b	is the degree of influence a specific manager has over costs, revenues, and other items
c	is the responsibility of the corporate controller
d	is another term for responsibility

Question 4 (1 point)

Sweet Charity Company is working on its cash budget for February. The budgeted beginning cash balance is $26,000. Budgeted cash receipts total $104,000 and budgeted cash disbursements total $100,000. The desired ending cash balance is $40,000. To attain its desired ending cash balance for February, the company needs to borrow ________.

a	$0
b	$10,000
c	$40,000
d	$70,000

Question 5 (1 point)

Sweet Charity Company manufactures candy canes. Budgeted sales for December are 10,000 units. Beginning finished goods inventory in December is budgeted to be 1,400 units, and ending finished goods inventory is budgeted to be 1,300 units. How many units must be produced in December?

a	9,900
b	10,000
c	10,100
d	12,700

Question 6 (1 point)

Twisty Taffy Company manufactures saltwater taffy and has predicted the following sales for four months of the current year:

	April	May	June	July
Sales in units	1,700	1,900	2,100	1,600

Targeted ending inventory for each month should be 20% of the next month's sales, and the prior March 31 inventory was consistent with that target. How many units should be purchased in the calendar second quarter of the year?

a	5,100
b	5,680
c	6,300
d	6,000

Question 7 (1 point)

True or False: Since the result of a master budget process is a set of financial statements, all rules of GAAP must be followed in preparing a budget.

True

False

Question 8 (1 point)

Swiss Chocolate Company manufactures heart boxes filled with chocolate for Valentine's Day. The cost formula for its overhead cost is $2,250 per month plus $16 per box. For the month of February, the company planned for activity of 502 boxes. The overhead cost in the budget for February would be closest to ________.

a	$10,580
b	$10,282
c	$10,686
d	$10,202

Question 9 (1 point)

True or False: In a company that is decentralized, top-down budgeting is typically used, since executives are very familiar with expected performance.

True

False

Question 10 (1 point)

True or False: Using the past financial history of a company is a feasible approach for evaluation of performance for the current period.

True

False