multiple choice 26 which of the following is not a reason why firms use budgets a pe 4313373

multiple choice 26 which of the following is not a reason why firms use budgets a pe 4313373

MULTIPLE CHOICE

26.Which of the following is not a reason why firms use budgets?

A.Performance evaluation.

B.Coordination.

C.Planning.

D. Operating leverage.

E.All of the above are reasons why firms use budgets.

LO1 – D

27.Which of the following is not a financial budget?

A.Production budget.

B.Budgeted Income Statement.

C.Cash budget.

D.Budgeted Balance Sheet.

E.All of the above are financial budgets.

LO1 – A

28.Budgets are used to:

A.Enable various departments to coordinate their activities in a way that benefits the company as a whole.

B.Highlight linkages among departments and force each department to consider how its actions influence the actions of other departments.

C.Communicate the plan targets to everyone in the organization.

D.A and C only.

E.All of the above are reasons budgets are used.

LO1 – E

29.Which of the following is the sequence involved in which operating budgets link long- and short-term plans?

A.Short-term plans; Operational plans; Evaluate; Long-term plans.

B.Short-term plans; Operations plans; Evaluate; Revise.

C.Long-term plans; Short-term plans; Operational plans; Revise.

D.Long-term plans; Operational plans; Evaluate; Revise.

E.None of the above.

LO1 – D

30.Which of the following is not an example of conflicts created in the budgeting process?

A.Because firms want to use the most up-to-date information about local operating conditions, they ask lower-level employees for this information, but these employees may not be forthright in sharing their information.

B.Because a production manager may be overly pessimistic about expected costs, the quality of information used to plan costs may be reduced.

C.Downplaying expected sales may lead to more achievable targets for the managers, but reduce the quality of information used to plan sales.

D.The planned targets in budgets become the benchmark for actual results, thereby facilitating control.

E.All of the above are examples of conflicts in the budgeting process.

LO1 – D

31.Which of the following is not a benefit of budgeting?

A.It allows for coordination between various business units.

B.It sets goals for the organization.

C.It formalizes the plans of management.

D.It reduces the need for analysis with regard to company expenses

LO-1 – Self-test  – D

32.Which is the correct order of budget preparation for a merchandising company?

a.Selling and administrative expense budget, cash budget, budgeted income statement, budgeted balance sheet.

b.Sales budget, cash budget, selling and administrative expense budget, budgeted income statement.

c.Sales budget, cash budget, budgeted balance sheet, budgeted income statement

d.Cash budget, selling and administrative expense budget, budgeted income statement, budgeted balance sheet.

LO1 – Self-test – A

33.Which of the following are questions marketing and production managers address when preparing the production budget?

A.Is there enough production capacity to meet projected sales?

B.Should the company add more temporary or permanent capacity?

C.What inventory level is needed for each product?

D.What is the estimated cost of direct material to be used in production?

E.All of the above are questions to address when preparing the production budget.

LO2 – E

34.The production budget is used to derive the budgets for which of the following?

A.Materials budget.

B.Labor budget.

C.Overhead budget.

D.A and B only.

E.A, B and C.

LO2 – E

35.Cody Manufacturing started doing business on January 1st of the current year.  Cody estimates that its sales will be 9,000 units in the first quarter, 7,000 units in the second quarter, 14,000 units in the third quarter and 12,000 units in the fourth quarter.  Cody’s selling price is set at $20 per unit and is not expected to change during the year.  Cody intends to have 10% of the next quarter’s sales in its ending inventory each quarter.  How many units should Cody budget for second quarter’s production?

A.6,300 units.

B.9,700 units.

C.7,700 units.

D.7,000 units.

E.None of the above.

LO2 – C

Looking for a similar assignment? Get help from our qualified experts!

Order Now

Related Posts