Chapter 7

Question 1

What is RESPONSIBILITY ACCOUNTING

Answer 1

system of accountability where managers are responsible of items of revenue and cost. profit planning and control.

Question 2

continuous budgets

Answer 2

yearly budgets + 1 month

Question 3

what does the budgeting process begin with?

Answer 3

The budgeting process begins with the preparation of the sales budget. The sales budget is a detailed schedule showing the expected sales for the budget period.

Question 4

An essential management tool that communicates management’s plans throughout the organization, allocates resources and and coordinates activities is….

Answer 4

The master budget

Question 5

1st step in budgeting process is…

Answer 5

creating a sales budget

Question 6

what budget is prepared after the sales budget???

Answer 6

the production budget

Question 7

both the production and the administrative budget are prepared using the

Answer 7

sales budget

Question 8

collections made on credit sales made to customers in prior periods PLUS collections on sales made in current budget period equals expected______

Answer 8

expected cash collections

Question 9

which budget shows the number of units that must be manufactured to satisfy sales needs and provide for the ending inventory?

Answer 9

the production budget: unit sales budgeted + desired ending inventory = needs - beginning inventory = total needs

Question 10

direct material budget relies directly on

Answer 10

PRODUCTION budget

Question 11

which budget tells you the raw materials that must be purchased to fulfill production budget and to provide for adequate inventories

Answer 11

Direct materials budget