Quiz 8 Flashcards
Operating plans are generally expressed through long-run budgets.
F
Short-run budget
A budget is the quantitative expression of a proposed plan of action by management for a specified period
T
Budgeting includes only the financial aspects of the plan and NOT any nonfinancial aspects such as the number of physical units manufactured.
F
Budgeting includes both financial and nonfinancial aspects of the plan.
An organization’s strategy matches its capabilities with the opportunities in the marketplace to accomplish its objectives.
T
Long-run planning and short-run planning are best performed independently of each other.
F
The feedback from budgets can lead to changes in plans and strategies
T
Bottom-up budgets entrusts senior managers to prepare budgets and lower-level managers to execute them.
F
TOP
When administered wisely, budgets promote communication and coordination among the various subunits of the organization
T
The revenues budget is prepared after all other operating budgets are prepared
F
Activity-based budgeting would permit the use of multiple drivers and multiple cost pools in the budgeting process.
T
11) Total finished units to be produced is based on the \_\_\_\_\_\_\_\_. A) direct material purchase budget B) budgeted sales units C) direct material usage budget D) budgeted manufacturing overhead
B
12) Financial planning software packages assist management with ________.
A) assigning responsibility to various levels of management
B) identifying the target customer
C) sensitivity analysis in their planning and budgeting activities
D) achieving greater commitment from lower management
C
13) When direct material and direct labor is the limiting factor, revenue budgets are usually based on ________.
A) expected demand of the company’s products
B) the capital in the budget period
C) the supply of indirect material and labor in the market
D) maximum units that can be manufactured
D
14) Juan Sugita Manufacturing expects to produce and sell 12,000 units of Big, its only product, for $20 each. Direct material cost is $3 per unit, direct labor cost is $10 per unit, and variable manufacturing overhead is $6 per unit. Fixed manufacturing overhead is $24,000 in total. Variable selling and administrative expenses are $1 per unit, and fixed selling and administrative costs are $3,000 in total. According to generally accepted accounting principles, inventoriable cost per unit of Big would be ________.
A) $21.00 per unit
B) $14.00 per unit
C) $13.00 per unit
D) $18.50 per unit
A
15) The budgeting process is most strongly influenced by ________.
A) the capital budget
B) the sales forecast
C) the budgeted statement of cash flows
D) the production budget
C
