Question 1

Russell Company has the following projected account balances for June 30, 2011:
  Required:
a. Prepare a budgeted income statement for June 2011
b. Prepare a budgeted balance sheet as of June 30, 2011.

Accepted Answer

a. Russell Company

Cost of ...

Question 2

A maintenance manager is most likely responsible for a(n) :

Accepted Answer

A)  revenue center
B)  investment center
C)  cost center
D)  profit center

Question 3

Budgets should:

Accepted Answer

A)  be flexible
B)  be administered rigidly
C)  only be developed for short periods of time
D)  include only variable costs

Question 4

When administered wisely, budgets promote communication and coordination among the various subunits of the organization.

Accepted Answer

A) True 
 B)False

Question 5

The order to follow when preparing the operating budget is:

Accepted Answer

A)  revenues budget, production budget, and direct manufacturing labor costs budget
B)  costs of goods sold budget, production budget, and cash budget
C)  revenues budget, manufacturing overhead costs budget, and production budget
D)  cash expenditures budget, revenues budget, and production budget.

Question 6

Kaizen budgeting does NOT make sense for cost centers.

Accepted Answer

A) True 
 B)False

Question 7

The operating budget process generally concludes with the preparation of the:

Accepted Answer

A)  production budget
B)  distribution budget
C)  research and development budget
D)  budgeted income statement

Question 8

Challenging budgets tend to:

Accepted Answer

A)  decrease line-management participation in attaining corporate goals
B)  increase failure
C)  increase anxiety without motivation
D)  motivate improved performance

Question 9

Responsibility accounting:

Accepted Answer

A)  is a system that measures the plans, budgets, actions, and actual results of a responsibility center
B)  is an arrangement of lines of responsibility within the organization
C)  explicitly incorporates continuous improvement anticipated during the budget period
D)  examines how a result will change if the original plan is not achieved

Question 10

Kaizen budgeting is driven by:

Accepted Answer

A)  management
B)  employees
C)  stockholders
D)  creditors

Question 11

The revenues budget should be based on the production budget.

Accepted Answer

A) True 
 B)False

Question 12

Answer the following questions using the information below:
Wallace Company provides the following data for next year:
  The gross profit rate is 40% of sales. Inventory at the end of December is $21,600 and target ending inventory levels are 30% of next month's sales, stated at cost.
-Purchases budgeted for January total:

Accepted Answer

A)  $130,800
B)  $72,000
C)  $69,840
D)  $74,160

Question 13

Financial analysts use the projected cash flow statement to do all of the following EXCEPT:

Accepted Answer

A)  plan for when excess cash is generated
B)  plan for short-term cash investments
C)  project cash shortages and plan a strategy to deal with the shortages
D)  project depreciation expense

Question 14

Answer the following questions using the information below:
The following information pertains to the January operating budget for Casey Corporation, a retailer:
 
-For January, budgeted gross margin is:

Accepted Answer

A)  $100,000
B)  $140,000
C)  $60,000
D)  $50,000

Question 15

Operating decisions primarily deal with:

Accepted Answer

A)  the use of scarce resources
B)  how to obtain funds to acquire resources
C)  acquiring equipment and buildings
D)  satisfying stockholders

Question 16

Budgetary slack provides management with a hedge against planned adverse circumstances.

Accepted Answer

A) True 
 B)False

Question 17

Operating budgets include all of the following EXCEPT:

Accepted Answer

A)  the revenues budget
B)  the budgeted income statement
C)  the administrative costs budget
D)  the budgeted balance sheet

Question 18

A limitation of comparing a company's performance against actual results of last year is that:

Accepted Answer

A)  it includes adjustments for future conditions
B)  feedback is no longer a possibility
C)  past results can contain inefficiencies of the past year
D)  the budgeting time period is set at one year

Question 19

A manager of a profit center is responsible for all of the following EXCEPT:

Accepted Answer

A)  sales revenue
B)  the cost of merchandise purchased for resale
C)  expanding into new geographic areas
D)  selling and marketing costs

Question 20

Perry Company has the following information:
  In addition, the gross profit rate is 40% and the desired inventory level is 30% of next month's cost of sales.
Required:
Prepare a purchases budget for April through June.

Accepted Answer

The answer of Perry Company has the following information:
 ...

Exam 6: Master Budget and Responsibility Accounting

Kaizen budgeting does NOT make sense for cost centers.

Correct Answer
verified

Perry Company has the following information: In addition, the gross profit rate is 40% and the desired inventory level is 30% of next month's cost of sales. Required: Prepare a purchases budget for April through June.

Correct Answer
verified

Russell Company has the following projected account balances for June 30, 2011: Required: a. Prepare a budgeted income statement for June 2011 b. Prepare a budgeted balance sheet as of June 30, 2011.

Correct Answer
verified
a. Russell Company
Cost of ...
View Answer

A manager of a profit center is responsible for all of the following EXCEPT:

Correct Answer
verified

Budgets should:

Correct Answer
verified

The revenues budget should be based on the production budget.

Correct Answer
verified

Budgetary slack provides management with a hedge against planned adverse circumstances.

Correct Answer
verified

Financial analysts use the projected cash flow statement to do all of the following EXCEPT:

Correct Answer
verified

When administered wisely, budgets promote communication and coordination among the various subunits of the organization.

Correct Answer
verified

A maintenance manager is most likely responsible for a(n) :

Correct Answer
verified

The operating budget process generally concludes with the preparation of the:

Correct Answer
verified

Operating budgets include all of the following EXCEPT:

Correct Answer
verified

The order to follow when preparing the operating budget is:

Correct Answer
verified

Kaizen budgeting is driven by:

Correct Answer
verified

Answer the following questions using the information below: The following information pertains to the January operating budget for Casey Corporation, a retailer: -For January, budgeted gross margin is:

Correct Answer
verified

Operating decisions primarily deal with:

Correct Answer
verified

Correct Answer
verified

Challenging budgets tend to:

Correct Answer
verified

Responsibility accounting:

Correct Answer
verified

A limitation of comparing a company's performance against actual results of last year is that:

Correct Answer
verified

Exam 6: Master Budget and Responsibility Accounting

Kaizen budgeting does NOT make sense for cost centers.

Correct AnswerverifiedShow Answer

Perry Company has the following information: In addition, the gross profit rate is 40% and the desired inventory level is 30% of next month's cost of sales. Required: Prepare a purchases budget for April through June.

Correct AnswerverifiedShow Answer

Russell Company has the following projected account balances for June 30, 2011: Required: a. Prepare a budgeted income statement for June 2011 b. Prepare a budgeted balance sheet as of June 30, 2011.

Correct Answerverifieda. Russell Company Cost of ...View AnswerShow Answer

A manager of a profit center is responsible for all of the following EXCEPT:

Correct AnswerverifiedShow Answer

Budgets should:

Correct AnswerverifiedShow Answer

The revenues budget should be based on the production budget.

Correct AnswerverifiedShow Answer

Budgetary slack provides management with a hedge against planned adverse circumstances.

Correct AnswerverifiedShow Answer

Financial analysts use the projected cash flow statement to do all of the following EXCEPT:

Correct AnswerverifiedShow Answer

When administered wisely, budgets promote communication and coordination among the various subunits of the organization.

Correct AnswerverifiedShow Answer

A maintenance manager is most likely responsible for a(n) :

Correct AnswerverifiedShow Answer

The operating budget process generally concludes with the preparation of the:

Correct AnswerverifiedShow Answer

Operating budgets include all of the following EXCEPT:

Correct AnswerverifiedShow Answer

The order to follow when preparing the operating budget is:

Correct AnswerverifiedShow Answer

Kaizen budgeting is driven by:

Correct AnswerverifiedShow Answer

Answer the following questions using the information below: The following information pertains to the January operating budget for Casey Corporation, a retailer: -For January, budgeted gross margin is:

Correct AnswerverifiedShow Answer

Operating decisions primarily deal with:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Challenging budgets tend to:

Correct AnswerverifiedShow Answer

Responsibility accounting:

Correct AnswerverifiedShow Answer

A limitation of comparing a company's performance against actual results of last year is that:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
verified
a. Russell Company
Cost of ...
View Answer

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