section 14

Question 1

strategic planning

Answer 1

LONG RANGE to achieve organization’s GOALS concerning
—products
—marketing
—financing

Question 2

capital budgeting

Answer 2

PLANNING for the ACQUISITION of operational or LONG TERM ASSETS like
property
plant
equipment

Question 3

operational budgeting (5)

Answer 3

detailed plans of IMMEDIATE GOALS for
sales
production
expenses
cash flows
financial statement results

Question 4

benefits of budgeting

Answer 4

Coordination
Communication
Authorization
Motivation
Performance Evaluation
Problem Resolution
Setting Goals and Objectives

Question 5

elements and sequencing of a MERCHANDISING operating budget

Answer 5

sales
inventory purchases…..selling & admin expense
cash flow—pro forma income statement…pro forma balance sheet

Question 6

elements and sequencing of a MANUFACTURING operating budget

Answer 6

sales
production…selling & admin expense

direct materials…direct labor…moc

cash flow
pro forma income statement…pro forma balance sheet

Question 7

T/F depreciation expense should be included in the cash flow budget

Answer 7

false

Question 8

The balance of AP on a pro-forma balance sheet would be available from the

Answer 8

materials purchases budget

Question 9

Finished goods inventory on a pro forma balance sheet would require that the number of units of budgeted endinging inventory be identified from the

Answer 9

production budget

Question 10

what cost should be left out of the cash flow budget?

Answer 10

depreciation expense

Question 11

variable costs of manufacturing should be based on the

Answer 11

of units produced

Question 12

variable selling/admin costs are based on

Answer 12

the # of units budgeted for sale

Question 13

pro forma statements are

Answer 13

projections