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Exam 23: Operational Budgeting

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Question 31

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When budgeted amounts are set at reasonable and achievable levels:

A) They reflect a "total quality management" philosophy of management.
B) A highly efficient department should fall slightly short of budget standards.
C) Meeting the budgeted amounts ensures a maximum level of profitability.
D) Failure to stay within the budget is viewed as an unacceptable level of performance.

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Question 32

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The total quality management approach to budgeting sets budgeted amounts at levels that can be achieved through reasonably efficient operations.

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Question 33

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The benefits of budgeting include all of the following except:

A flexible budget:

A flexible budget is one that:

Budgeted debt service costs On April 1,Fisher Corporation borrowed $400,000 from its bank by signing a 9%,5-year note payable.The note calls for 60 monthly payments of $6,150,which includes both interest and principal components. (a)Interest expense budgeted for April amounts to: $________ (b)The carrying value of the note to be reported in the company's budgeted balance sheet as of April 30 is: $________ (c)Interest expense budgeted for May amounts to (round to nearest whole dollar): $________ (d)The carrying value of the note to be reported in the company's budgeted balance sheet as of May 31 is (round to nearest whole dollar): $________

Which of the following is not a benefit of a careful and thorough budgeting process?

The production schedule in units:

The master budget may be comprised of:

Which of the following is not considered an operating budget?

[The following information applies to the questions displayed below.] On October 1 of the current year,Molloy Corporation prepared a cash budget for October,November,and December.All of Molloy's sales are made on account.The following information was used in preparing estimated cash collections: Approximately 60% of all sales are collected in the month of the sale,30% is collected in the following month,and 10% is collected in the month thereafter. -Budgeted collections from customers in October total:

Which element of a master budget would normally be prepared first?

As the volume of output increases:

[The following information applies to the questions displayed below.] The following information is from the manufacturing budget and budgeted financial statements of Altman Corp.: -For the year,budgeted cash payments to suppliers amounted to:

A flexible budget allows management to spend more or less for labor and materials without regard to the amount of production.

[The following information applies to the questions displayed below.] Ross Corporation makes all sales on account.The June 30th balance sheet balance in its accounts receivable is $400,000,of which $240,000 pertain to sales that were made during June.Budgeted sales for July are $1,250,000.Ross collects 70% of sales in the month of sale;20% in the following month;and the final 10% in the second month after the sale. -What are Ross's budgeted collections for July?

Cash receipts budget The director of budgeting for Bond Products is beginning the process of preparing a cash budget for each month of the coming year.The sales forecast for the month of January is as follows: In the past,the accounts receivable originating from credit sales have been collected in the following pattern: Credit sales in the last two months of the current year,some of which remain uncollected at year-end,were as follows: Compute the amount of cash expected to be collected from customers in January of the coming year.

Explain what is meant by "profit rich,yet cash poor."

Which of the following is not a characteristic of the total quality approach to setting budgetary targets?

Mentha Company currently has the following statistics: Days in accounts receivable - 68 Operating cycle - 148 What is Mentha's days in inventory?