Download Should you always use a budget as a tool to guide your spending

Should you always use a budget as a
tool to guide your spending priorities?
1. Yes
2. No
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Do all companies like The North Face use
budgets to guide their spending priorities?
1. Yes
2. No
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2
Does The North Face only budget for trip
expenses and to plan the manufacturing costs for
its outdoor clothing and equipment production?
1. Yes
2. No
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2
Do you think that it is difficult for a large
company to budget for the year?
1. Yes
2. No
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2
Should all companies, large and small, use
budgeting to help guide their spending
priorities?
1. Yes
2. No
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A budget charts a course for a business by
outlining the plans of the business in
financial terms.
1. True
2. False
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A flexible budget shows the expected results
of a responsibility center for only one activity
level.
1. True
2. False
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Managers often use computer spreadsheets
or simulation models to represent the
operating and budget relationships.
1. True
2. False
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2
The budgeting process begins
by estimating sales.
1. True
2. False
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2
The production budget provides the starting
point for preparing the sales budget and the
direct labor cost budget.
1. True
2. False
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2
The cash budget presents the expected
receipts and payments of cash for a period
of time.
1. True
2. False
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2
The capital expenditures budget
summarizes plans for acquiring fixed assets.
1. True
2. False
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2
Which of the following is not an
objective of budgeting?
1. Establishing specific
goals
2. Executing plans to
achieve the goals
3. Reorganizing the
structure of the
company
4. Periodically
comparing actual
results with the
goals
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Establishing specific goals for
future operations is part of the
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1. planning function
2. directing function
3. controlling
function
4. constraining
function
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A 12-month budget which is continuously revised by
removing the data for the period just ended and adding
estimated budgeted data for the same period next year is
called a
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1. static budget
2. continuous budget
3. zero-based
budget
4. master budget
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Which of the following budgets shows the
expected results of a responsibility center for
several activity levels?
25%
1.
2.
3.
4.
25%
25%
25%
master budget
continuous budget
static budget
flexible budget
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The income statement budget
includes all of the following except
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1.
2.
3.
4.
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sales budget
production budget
cash budget
direct labor cost
budget
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The budgeted volume of production is computed
from which of the following equations?
1.
2.
3.
4.
Expected units to be sold +
desired units in ending
inventory – estimated units in
beginning inventory
Expected units to be sold +
desired units in ending
inventory + estimated units in
beginning inventory
Expected units to be sold desired units in ending
inventory – estimated units in
beginning inventory
Expected units to be sold desired units in ending
inventory + estimated units in
beginning inventory
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4
Which of the following is a
balance sheet budget?
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25%
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1. Sales budget
2. Production budget
3. Direct materials
purchases budget
4. Cash budget
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In preparing the cost of goods sold budget,
which of the following will not be used?
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25%
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1. Direct labor cost
budget
2. Direct materials
purchases budget
3. Sales budget
4. Factory overhead
cost budget
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The equation to compute the total cost of the
direct materials to be purchased is
1.
2.
3.
4.
materials required for production
- desired ending materials
inventory – estimated beginning
materials inventory
materials required for production
+ desired ending materials
inventory – estimated beginning
materials inventory
materials required for production
+ desired ending materials
inventory + estimated beginning
materials inventory
materials required for production
- desired ending materials
inventory + estimated beginning
materials inventory
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25%
2
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3
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4
Which of the following would not
appear on a cash budget?
25%
25%
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25%
1. Cash receipts from
sales
2. Depreciation
expense
3. Cash payments for
manufacturing costs
4. Cash balance at the
beginning of month
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