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Accounting Principles , Tenth Edition

Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

Chapter 23

Budgetary Planning - all with Video Answers

Educators

Chapter Questions

Problem 1

Which of the following is not a benefit of budgeting?
a. Management can plan ahead.
b. An early warning system is provided for potential problems
c. It enables disciplinary action to be taken at every level of responsibility.
d. The coordination of activitics is facilitated.

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00:57

Problem 2

A budget:
a. is the responsibility of management accountants.
b. is the primary method of communicating agreed-upon objectives throughout an organization.
c. ignores past performance because it represents management's plans for a future time period.
d. may promote efficiency but has no role in evaluating performance.

Muhammad Ahsan
Muhammad Ahsan
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01:37

Problem 3

The essentials of effective budgeting do not include:
a. top-down budgeting.
b. management acceptance.
c. research and analysis.
d. sound organizational structure.

Aditya Sood
Aditya Sood
Numerade Educator

Problem 4

Compared to budgeting. long-range planning generally has the:
a. same amount of detail.
b. longer time period.
c. same emphasis.
d. same time period.

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00:57

Problem 5

A sales budget is:
a. derived from the production budget.
b. management's best estimate of sales revenue for the year.
c. not the starting point for the master budget.
d. prepared only for credit sales

Muhammad Ahsan
Muhammad Ahsan
Numerade Educator

Problem 6

The formula for the production budget is budgeted sales in units plus:
a. desired ending merchandise inventory less beginning merchandise inventory.
b. beginning finished goods units less desired ending finished goods units.
c. desired ending direct materials units less beginning direct materials units.
d. desired ending finished goods units less beginning finished goods units.

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Problem 7

Direct materials inventories are kept in pounds in Byrd Company, and the total pounds of direct materials needed for production is 9,500 . If the beginning inventory is 1,000 pounds and the desired ending inventory is 2,200 pounds, the total pounds to be purchased is:
a. 9,400 .
c. 9,700 .
b. 9.500 .
d. 10,700 .

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Problem 8

The formula for computing the direct labor budget is to multiply the direct labor cost per hour by the:
a. total required direct labor hours.
b. physical units to be produced.
c. equivalent units to be produced.
d. No correct answer is given.

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Problem 9

Each of the following budgets is used in preparing the budgeted income statement except the:
a. sales budget.
b. selling and administrative budget.
c. capital expenditure budget.
d. direct labor budget.

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01:00

Problem 10

The budgeted income statement is:
a. the end-product of the operating budgets.
b. the end-product of the financial budgets.
c. the starting point of the master budget.
d. dependent on cash receipts and cash disbursements.

Natalie Britton
Natalie Britton
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Problem 11

The budgeted balance sheet is:
a. developed from the budgeted balance sheet for the preceding year and the budgets for the current year.
b. the last operating budget prepared.
c. used to prepare the cash budget.
d. All of the above.

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Natalie Britton
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03:46

Problem 12

The format of a cash budget is:
a. Beginning cash balance + Cash receipts + Cash from financing - Cash disbursements = Ending cash balance.
b. Beginning cash balance + Cash receipts - Cash disbursements $+/$ - Financing $=$ Ending cash balance.
c. Beginning cash balance + Net income - Cash dividends $=$ Ending cash balance.
d. Beginning cash balance + Cash revenues - Cash expenses $=$ Ending cash balance.

Akash M
Akash M
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Problem 13

Expected direct materials purchases in Read Company are $$\$ 70,000$$ in the first quarter and $$\$ 90,000$$ in the second quarter. Forty percent of the purchases are paid in cash as incurred, and the balance is paid in the following quarter. The budgeted cash payments for purchases in the second quarter are:
a. $$\$ 96,000$$.
c. $$\$ 78,000$$.
b. $$\$ 90,000$$.
d. $$\$ 72,000$$.

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01:34

Problem 14

The budget for a merchandiser differs from a budget for a manufacturer because:
a. a merchandise purchases budget replaces the production budget.
b. the manufacturing budgets are not applicable.
c. None of the above.
d. Both (a) and (b) above.

Willis James
Willis James
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01:37

Problem 15

In most cases, not-for-profit entities:
a. prepare budgets using the same steps as those used by profit-oriented enterprises.
b. know budgeted cash receipts at the beginning of a time period, so they budget only for expenditures.
c. begin the budgeting process by budgeting expenditures rather than receipts.
d. can ignore budgets because they are not expected to generate net income.

Aditya Sood
Aditya Sood
Numerade Educator