21. The sales budget shows the expected sales quantity and price of each product or service.
a. True
b. False
22. Which of the following is NOT a potential disadvantage of participative budgeting?
a. pseudoparticipation
b. performance feedback
c. unrealistic standards
d. budgetary slack
23. The budget director is responsible for directing and coordinating the budgeting process.
a. True
b. False
24. Once all the operating budgets have been completed, the net income can be estimated.
a. True
b. False
25. The budget committee
a. has the responsibility to review the budget
b. prepares financial statements for the auditor
c. resolves differences that may arise as the budget is prepared
d. both a and b
26. A ..static...budget is developed around one particular level of activity.
27. Laramie, Inc., has an operating environment with considerable uncertainty. The company prepares the budget for several different volume levels.
Laramie had the following budgeted data:
Budgeted variable costs per unit:
Direct materials: $7.00
Direct labor: 10.00
Supplies: 1.00
Indirect labor: 0.50
Power: 0.05
Budgeted fixed overhead for 2014:
Supervision: $4,000
Depreciation: 3,000
Rent: 2,000
What are the budgeted costs for materials if 5,000 units were produced?
a. $35,000
b. $9,000
c. $50,000
d. $4,000
5,000 x $7 = $35.000
28. The budgets that are comprehensive financial plans made up of various individual departmental and activity budgets are the:
a. Financial budgets
b. Master budgets
c. Operating budgets
d. Continuous budgets
29. Participative budgeting detracts from a manager's sense of responsibility and creativity.
a. True
b. False
30. Activity-based budgets
a. work in environments where the products are homogenous and the production process is simple
b. use the knowledge of cost behavior to split the functional-based line items into fixed and variable components
c. rely on the use of functional-based line items
d. start with output and then determine the resources necessary to create that output
a. True
b. False
22. Which of the following is NOT a potential disadvantage of participative budgeting?
a. pseudoparticipation
b. performance feedback
c. unrealistic standards
d. budgetary slack
23. The budget director is responsible for directing and coordinating the budgeting process.
a. True
b. False
24. Once all the operating budgets have been completed, the net income can be estimated.
a. True
b. False
25. The budget committee
a. has the responsibility to review the budget
b. prepares financial statements for the auditor
c. resolves differences that may arise as the budget is prepared
d. both a and b
26. A ..static...budget is developed around one particular level of activity.
27. Laramie, Inc., has an operating environment with considerable uncertainty. The company prepares the budget for several different volume levels.
Laramie had the following budgeted data:
Budgeted variable costs per unit:
Direct materials: $7.00
Direct labor: 10.00
Supplies: 1.00
Indirect labor: 0.50
Power: 0.05
Budgeted fixed overhead for 2014:
Supervision: $4,000
Depreciation: 3,000
Rent: 2,000
What are the budgeted costs for materials if 5,000 units were produced?
a. $35,000
b. $9,000
c. $50,000
d. $4,000
5,000 x $7 = $35.000
28. The budgets that are comprehensive financial plans made up of various individual departmental and activity budgets are the:
a. Financial budgets
b. Master budgets
c. Operating budgets
d. Continuous budgets
29. Participative budgeting detracts from a manager's sense of responsibility and creativity.
a. True
b. False
30. Activity-based budgets
a. work in environments where the products are homogenous and the production process is simple
b. use the knowledge of cost behavior to split the functional-based line items into fixed and variable components
c. rely on the use of functional-based line items
d. start with output and then determine the resources necessary to create that output
