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Exam 9: The Master Budget

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Question 41

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Which of the following is a potential disadvantage of participative budgeting?

A) Managers are more likely to be motivated by budgets they help create.
B) Managers may build slack into the budget.
C) Managers should acquire knowledge to create realistic budgets.
D) None of the above are true.

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Question 42

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Budgets are used to accomplish all of the following tasks, except

A) planning for the future.
B) controlling operations.
C) recording actual results.
D) directing operations.

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Question 43

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Whistle Works manufacturers safety whistle keychains. They have the following information available to prepare their master budget: Whistle Works sells each whistle for $12. How many units does Whistle Works thinks it will sell in December?

The ________ budget begins with the number of units to be sold.

Budget committee is a what-if technique that asks what a result will be if a predicted amount is not achieved or if an underlying assumption changes.

Whistle Works manufacturers safety whistle keychains. They have the following information available to prepare their master budget: Whistle Works sells each whistle for $12. It's been determined that each unit costs $7.25 to manufacture. How much is total budgeted operating expenses for the year ended 2016?

Sally's neighbor recently spent $180 on fitness clothes at the Workout Shop. The neighbor used a credit card to purchase the workout clothes and the store charged a transaction fee of $0.21 plus a fee of 1.50% of the total cost of the clothes charged on the credit cards. What is the total cost of the workout clothes that Sally's neighbor paid to purchase the workout clothes?

The manager at a merchandising company does not prepare a direct materials budget.

Merchandising companies prepare a direct materials budget.

Budgets communicate financial plans to employees at all levels in the company.

Piatt Company expects cash sales for July of $16,000, and a 23% monthly increase during August and September. Credit sales of $1400 in July should be followed by 29% increases during August and September. What are budgeted cash sales and budgeted credit sales for September respectively?

Strategic planning involves setting short-term goals that extend three to four months into the future.

Managers may intentionally build slack into the budget

Desired ending inventory is 25% more than beginning inventory. If purchases total $160,000, which of the following statements is true regarding cost of goods sold (COGS) ?

The format of the "cost of goods sold, inventory, and purchases" budget is as follows:

Loyal Pet Company expects to sell 6000 beefy dog treats in January and 10,000 in February for $2 each. What will be the total sales revenue reflected in the sales budget for those months?

Which of the following types of cash outlays contains its own budget?

In preparing the operating budget, the first step is preparing the

"Financial budget" is best described by which of the following?

On the direct materials budget, the total quantity of direct materials to purchase is computed as