Question1

Which of the following is a suggested technique for managing the budgeting process in a manner that increases employee motivation?

Select one:

A.Never alter the budget

B.Top management should disassociate itself from the budget

C.Measure the budget against performance only when assessing poor performers

D.Emphasize the budget as a planning device

Question2

Which of the following statements concerning the minimum level approach to budgeting istrue?

Select one:

A.The minimum level approach to budgeting has been more widely used in government than in business organizations.

B.The minimum level approach to budgeting budgets costs for a coming period as a dollar or percentage change from the amount budgeted or spent in some previous period.

C.The minimum level approach to budgeting budgets physical inputs and costs as functions of planned activity.

D.The minimum level approach to budgeting establishes a base amount for all budget items and requires explanation or justification for any budgeted amount above that level.

Question3

Which of the following statements concerning the cash budget istrue?

Select one:

A.The cash budget summarizes all cash receipts and disbursements during the budget period.

B.The cash budget summarizes all revenues and expenses during the budget period.

C.The cash budget summarizes all economic activities during the budget period.

D.The cash budget summarizes all sales and expenses during the budget period.

Question4

Which of the following statements concerning the cash disbursements amount in the cash budget is true in a manufacturing setting, but not true a merchandise setting?

Select one:

A.The cash disbursements amount is no longer based off of the purchasing budget.

B.The cash disbursements amount includes planned disbursements for conversion costs.

C.The cash disbursements amount includes planned disbursements for ending inventory.

D.The cash disbursements does not need to equal changes in finished goods inventory.

Question5

Kent Company has a sales budget for next month of $1,000,000. Cost of goods sold is expected to be 25 percent of sales. All goods are paid for in the month following purchase. The beginning inventory of merchandise is $50,000, and an ending inventory of $64,000 is desired. Beginning accounts payable is $160,000. For Kent Company, the ending accounts payable should be:

Select one:

A.$264,000

B.$341,000

C.$356,000

D.$414,000

Question6

The Year 1 selling expense budget for Caramel Corporation is as follows:

Budgeted sales	$1,250,000
Selling costs:

	Delivery expenses	$ 25,000
	Commission expenses	30,000
	Advertising expenses	10,000
	Office expenses	6,000
	Miscellaneous expenses	15,000

Total

$ 121,000

Delivery and commission expenses vary proportionally with budgeted sales in dollars. Advertising and office expenses are fixed. Miscellaneous expenses include $5,000 of fixed costs. The rest varies with budgeted sales in dollars. The Year 2 budgeted sales is $5,000,000. What will be the value for commission expenses in the Year 2 selling expense budget?

Select one:

A.$120,000

B.$122,000

C.$102,000

D.$ 24,000

Question7

Which of the following statements concerning zero-based budgeting istrue?

Select one:

A.Zero-based budgeting is a variation of the incremental approach.

B.Zero-based budgeting is mainly used to assess research and development departments and similar departments where the relationship between inputs and outputs is weakest.

C.Zero-based budgeting specifies that every line item must be rounded to the nearest thousand dollar increment.

D.Zero-based budgeting specifies that every expenditure must be justified.

Question8

Pink Transportation's sales budget for the first quarter follows:

January	$125,000
February	300,000
March	290,000

All sales are on account (credit) with 50% collected in the month of sale, 30% collected in the following month after sale, and 20% collected in the second month after sale. There are no uncollectable accounts.

The Accounts Receivable balance that would appear on the Balance Sheet for March is:

Select one:

A.$150,500

B.$142,500

C.$205,000

D.$105,000

Question9

Which of the following costs would be reported in the general and administrative expense budget?

Select one:

A.Factory overhead

B.Expenses incurred in an accounting department

C.Sales commissions

D.Direct manufacturing labor

Question10

_______________ tends to tie into all of the other budgets.

Select one:

A.The purchasing budget

B.The cash budget

C.The operating budget

D.The sales budget