ACCT2101 Exam 2 Review

(Ch 9) Which of the following is not a benefit of budgeting?

• Management can plan ahead

• An early warning system is provided for potential problems

• It enables disciplinary action to be taken at every level if responsibility

• The coordination of activities is facilitated

(Ch 9) A budget:

• is the responsibility of management accountants

• is the primary method of communicating agreed-upon objectives throughout an organization

• ignores past performance because it represents management's plans for a future time period

• may promote efficiency but has no role in evaluating performance

(Ch 9) The essentials of effective budgeting do not include:

• top-down budgeting

• management acceptance

• research and analysis

• sound organizational structure

(Ch 9) The equation for the production budget is budgeted sales in units plus:

• desired ending merchandise inventory less beginning merchandise inventory

• beginning finished goods units less desired ending finished goods units

• desired ending direct materials units less beginning direct materials units

• desired ending finished goods units less beginning finished goods units

(Ch 9) Each of the following budgets is used in preparing the budgeted income statement except the:

• sales budget

• selling and administrative expense budget

• capital expenditure budget

• direct labor budget

(Ch 10) Budgetary control involves all but one of the following:

• modifying future plans

• analyzing differences

• using static budgets but not flexible budgets

• determining differences between actual and planned results

(Ch 10) Depending on the nature of the report, budget reports are prepared:

• daily

• weekly

• monthly

• all of the answer choices are correct

(Ch 10) A static budget is useful in controlling costs when cost behavior is:

• mixed

• fixed

• variable

• linear

(Ch 10) A production manager is a manufacturing company would most likely receive a:

• sales report

• income statement

• scrap report

• shipping department overhead report

(Ch 10) A static budget is:

• a projection of budget data at several levels of activity within the relevant range of activiy

• a projection of budget data at a single level of activity

• compared to a flexible budget in a budget report

• never appropriate in evaluating a manager's effectiveness in controlling costs