Reference no: EM133186106
Questions -
Q1. ABC Company has provided you with information required to complete their budgeted balance sheet. If they provided a cash budget showing an ending cash balance of $9,556 and accounts payable of $4,556, and no other balances, where would you record the difference?
a. $5,000 to inventory
b. $5,000 to stockholder's equity
c. $5,000 to other assets.
Q2. One of the goals of participatory budgeting is to:
a. Creat hard numbers, and hold managers completely responsible for meeting the goals.
b. Force front-line managers to work within a specified budget, even if it is unreasonable.
c. Creat an environment of harmony and teamwork, since everyone involved in a particular department has a say in the budgeting process.
Q3. Because the sections of the master budget interrelate it is important to:
a. Give each department the task to complete their own budget, then meet and complete the sales budget together.
b. Do each component independently and bring them all together to do the budgeted income statement.
c. Prepar them in a specific order, since some sections need to be completed to provide information for another budget area.
Q4. XYZ Company produces widgets. They have budgeted for 5,000 widgets to be sold, and have two machine options available,. Machine one requires human supervision and makes 1,000 widgets per hour, while machine two runs by itself, but only makes 200 widgets per hour. Which machine should XYZ use?
a. We don't have enough information to determine which machine to use.Cost drivers may include waste, repairs, utility usage or several other cost drivers.
b. We should use machine one because it produces more widgets per hour.
c. We should use machine two because even though it is slower, it does not require labor.
Q5. A good way to avoid the pitfalls of a static budget would be:
a. Cease production or sales when your budgeted numbers are reached.
b. Prepar a static budget with columns for every possible outcome.
c. Prepar a flexible budget that takes into account various levels of sales.
Q6. XYZ Company needs to know their cash disbursements for selling and administrative expense to complete their cash budget. Budgeted unit sales are 500 with a variable rate of $5 per unit. Total fixed expenses are $15,000 including $2,500 in depreciation. Calculate their cash disbursement amount:.
a. $12,500
b. $17,500
c. $15,000
Q7. A corrective action plan or change in the budget may be necessary if:
a. There is an unavoidable increase in the electricity rates, and your company depends on electricity to run machines 24 hours per day.
b. You accidentally signed up for the wrong cell phone plan and now can't change it. You don't want your budget to reflect poorly on you, so you move money from another expense line to cover the additional cost.
c. You decide to take all of your department managers on a golf outing that was not included in the original budget, and there are no funds set aside for these type of events.
Q8. XYZ Company is working on their direct labor budget. They are a new company and this is their first year in production. If they have $10,000 budgeted for direct labor to build 2280 of their product, and the wage rate for production workers is $24 per hour, how many hours of labor will they have available to complete the work?
a. 105.26 hours
b. 438 hours
c. 416.67 hours
Q9. FlourPower Bakery is working on their direct materials budget. If they use ½ pound of flour per loaf of bread, and plant to make 500 loaves of bread, but need 50 pounds in raw material inventory, how many pounds of flour should their buyer purchase, assuming there are 100 pounds in their beginning inventory?
a. 200 pounds
b. 250 pounds
c. 300 pounds