M5 Budgeting: Part 1

Question 1

process of determining the specific objectives and means by which strategic plans will be achieved

Answer 1

Operational and tactical planning

Question 2

Documents specific ST operating performance goals for a period, normally one year or less

Answer 2

Master budget “annual business plan”

Question 3

Budgets that define the detailed sources and uses of funds

Answer 3

Financial budgets

Question 4

In production budgets, Formula between production, sales and inventory levels

Answer 4

Budgeted sales
+Desired Ending Inventory
(Beginning Inventory)
= Budgeted production

Question 5

Production budgets –> Formula for DM # units to be purchased

Answer 5

Units of DM needed for a production period
+Desired EI at end of period
(BI at start of period)
=Units of DM to be purchased for period

Question 6

Production budgets –> Formula for DM cost of DM to be purchased

Answer 6

Units of DM to be purchased for the period
*Cost per unit
=Cost of DM to be purchased for the period

Question 7

Production budgets –> Formula for DM usage

Answer 7

Beginning Inv @ cost
+Purchases at Cost (from above)
-EI @ cost
=DM usage (cost of materials used)

Question 8

Production budgets –> Formula for DL

Answer 8

Budgeted production (units)
*Hours required to produce each unit
=Total # hrs needed
*hourly wage rate
=Total wages

Question 9

Production budgets –> Cost of goods manufactured formula

Answer 9

Cost of goods manufactured
+Beginning FG inventory
-Ending FG Inventory
=COGS

Question 10

Standards made by management without employee input

Answer 10

Authoritative standards

Question 11

Static budget contains which of the following amounts?

___costs for ____ outputs

Answer 11

BUDGETED costs for BUDGETED outputs

Question 12

Last type of budget to be produced in the budgeting process?

Answer 12

CASH