Chapter 21 Budgeting

Question 1

An accounting device used to plan and control resources of operational departments and divisions

Answer 1

Budgets

Question 2

Involves setting goals to guide decisions and help motivate employees

Answer 2

Planning

Question 3

Involves decisions and actions to achieve budgeted goals

Answer 3

Directing

Question 4

An organizational unit for which a manager is assigned the authority and responsibility for achieving the center’s budgeted goals

Answer 4

Responsibility Center

Question 5

Involves comparing actual performance against the budgeted goals

Answer 5

Controlling

Question 6

Excess resources set within a budget to provide for uncertain events

Answer 6

Budgetary slack

Question 7

A condition that occurs when individual objectives conflict with organizational objectives

Answer 7

Goal Conflict

Question 8

A method of budgeting that maintains a 12-month projection into the future

Answer 8

Continuous budgeting

Question 9

A concept of budgeting that requires managers to estimate sales, production, and operating data as though operations are being started for the first time; this approach has the benefit of taking a fresh view of operations each year

Answer 9

Zero-based budgeting

Question 10

A budget that shows the expected results of a responsibility center for one activity level

Answer 10

Static budget

Question 11

A budget that shows the expected results of a responsibility center for several activity levels.

Answer 11

Flexible budget

Question 12

The comprehensive budget plan linking all the individual budgets related to sales, costs of goods sold, operating expenses, projects, capital expenditures, and case

Answer 12

Master Budget

Question 13

One of the major elements of the income statement budget that indicates the quantity of estimated sales and the expected unit selling price

Answer 13

Sales budget

Question 14

A budget of estimated unit production to meet budgeted sales and desired inventory levels

Answer 14

Production budget

Question 15

Sold + Ending Inventory - Beginning Inventory

Answer 15

Production budget

Question 16

A budget that estimates the quantities of direct materials to be purchased to support budgeted production and desired inventory levels

Answer 16

direct materials budget

Question 17

Budget that estimates direct labor hours and related costs needed to support budget production

Answer 17

direct labor cost budget

Question 18

Budget that estimates the cost for each item of factory overhead needed to support budgeted production

Answer 18

factory overhead cost budget

Question 19

A budget of the estimated direct materials, direct labor, and factory overhead consumed by sold products

Answer 19

Cost of goods sold budget