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Which one of the combinations listed correctly depicts the chronological order of preparation for the following budgets?I. Cost of goods sold budgetII. Production budgetIII. Purchases budgetIV. Administrative budget
The major feature of zero-based budgeting (ZBB) is that it:
The type of budget that is available on a continuous basis for a specified future period -- by adding a month, quarter, or year in the future as the month, quarter, or year just ended is dropped -- is called a(n):
Which one of the following statements best describes budgetary slack?
Which one of the following is usually not cited as being an advantage of a formal budgetary process?
The use of the master budget throughout the year as a constant comparison with actual results signifies that the master budget is also a:
Which of the following statements regarding budgets is false?
Which one of the following schedules would be the last item to be prepared in the normal budget preparation process?
All of the following statements concerning standard costs are correct except that:
Which one of the following statements concerning approaches for the budget development process is correct?
The primary role of the budget director and the budgeting department is to:
In developing a comprehensive budget for a manufacturing company, which one ofthe following items should be done first?
The master budget process usually begins with the:
When sales volume is seasonal in nature, certain items in the budget must be coordinated. The three most significant items to coordinate in budgeting seasonal sales volume are:
The budget that is usually the most difficult to forecast is the:
In preparing a corporate master budget, which one of the following is most likely to be prepared last?
The production budget process usually begins with the:
All of the following are advantages of top-down budgeting as opposed to participatory budgeting, except that it:
While an operating budget is a key element in planning and control, it is not likely to:
All of the following are criticisms of the traditional budgeting process except that it:
An advantage of incremental budgeting when compared with zero-based budgeting is that incremental budgeting
Which one of the following best describes the order in which budgets should be prepared when developing the annual master operating budget?
A budget manual, which enhances the operation of a budget system, is most likely to include:
All of the following are advantages of the budgeting process except that the budget:
The financial budget process includes:
Which of the following is normally included in the financial budget of a firm?
Which one of the following may be considered an independent item in the preparation of the master budget?
A budget helps a company control costs by setting cost guidelines. However, a budget also performs the function(s) of:
There are various budgets within the master budget cycle. One of these budgets is the production budget.Which one of the following best describes the production budget?
The major disadvantage of a budget produced by means of a top-down process is:
The major appeal of zero-based budgeting is that it:
When comparing performance report information for top management with that for lower-level management,
All of the following are advantages of the use of budgets in a management controlsystem except that budgets:
Medico has found that its annual budgets are quickly outdated once actual data is recorded.Sometimes actual preparations have already begun for the period being budgeted by the time the annual budget is finished, which leaves no time to react to changing factors.Medico wants the budget to be as up-to-date as possible, and management is willing to revise budgets as needed. Which budgeting solution would be most appropriate for Medico?
Zero-based budgeting forces managers to:
Which one of the following best describes the role of top management in the budgeting process? Top management:
Which one of the following is most important to a successful budgeting effort?
In an organization that plans by using comprehensive budgeting, the master budget is:
Which one of the following is not considered to be a benefit of participative budgeting?
The foundation of a profit plan is the:
After the goals of the company have been established and communicated, the next step in the planning process is development of the:
Which budget is prepared after the creation of the cash budget?
An advantage of participative budgeting is that it:
The budget that describes the long-term position and objectives of an entity within its environment is the:
Which one of the following is not an advantage of activity-based budgeting?
In the budgeting and planning process for a firm, which one of the following should be completed first?
Which of the following is normally included in the operating budget?
Which one of the following budgeting methodologies would be most appropriate for a firm facing a significant level of uncertainty in unit sales volumes for next year?
All of the following are considered operating budgets except the:
The finance department of a large company has prepared a master budget with very limited expense budgets for each department. The department managers are worried about being held accountable for these assigned targets, but senior management wants to keep spending reduced to allow for contingencies and strategic adjustments to the company-wide master budget. Based on this information, this budget process is:
Wilson Company uses a comprehensive planning and budgeting system. The proper order for Wilson to prepare certain budget schedules would be:
Which one of the following is not an advantage of a participatory budgeting process?
The starting point for creating a master budget for a proprietary secretarial school would be:
Granger Company is reviewing its standard machine hours per unit to use in its budget for the upcoming year. The machine manufacturer's specifications indicated a unit could be made in 0.75 hours, and a bench marking study showed a competitor produced at a speed of 0.78 machine hours per unit.Granger's actual results from last year averaged 0.83 machine hours per unit even though a standard of 0.80 machine hours per unit had been established using engineering studies. The standard Granger should use in its upcoming budget is:
The Yummy Dog Bone Company is anticipating that a major supplier might experience a strike this year.Because of the nature of the product and emphasis on quality, extra production cannot be stored as finished goods inventory.When developing a contingency budget that would anticipate a direct materials buildup, the two most significant items that will be affected are:
When developing a budget, an external factor to consider in the planning process is:
Ineffective budget control systems are characterized by:
One of the primary advantages of budgeting is that it:
Which one of the following items should be done first when developing a comprehensive budget for a manufacturing company?
One approach for developing standard costs incorporates communication, bargaining, and interaction among product line managers; the immediate supervisors for whom the standards are being developed; and the accountants and engineers before the standards are accepted by top management. This approach would best be characterized as a(n):