CHAPTER 8. MASTER BUDGETING
QUESTIONS WITH COMPLETE
ANSWERS
A jjbudget jjis jja jjdetailed jjplan jjfor jjthe jjfuture jjthat jjis jjusually jjexpressed jjin jjformal
jjqualitative jjterms. jj- jjAnswer jjFalse
Reason:
A jjbudget jjis jjusually jjexpressed jjin jjformal jjquantitative jjterms.
Recognizing jjindividuals jjat jjall jjlevels jjof jjthe jjorganization jjas jjteam jjmembers jjwhose
jjviews jjand jjjudgments jjare jjvalued jjby jjtop jjmanagement jjis jjan jjadvantage jjof jj-
jjAnswer jjself-imposed jjbudgeting
A jjnumber jjof jjseparate, jjbut jjinterdependent, jjbudgets jjthat jjformally jjlay jjout jjthe
jjcompany's jjsales, jjproduction, jjand jjfinancial jjgoals jjare jjcontained jjin jjthe jj- jjAnswer
jjmaster jjbudget
The jjfirst jjstep jjin jjthe jjbudgeting jjprocess jjis jjpreparing jjthe jj- jjAnswer jjsales jjbudget
Reason:
The jjsales jjbudget jjhelps jjdetermine jjhow jjmany jjunits jjneed jjto jjbe jjproduced, jjso jjit jjis
jjprepared jjbefore jjthe jjproduction jjbudget.
The jjdirect jjmaterials jjbudget jjcannot jjbe jjcompleted jjuntil jja jjcompany jjknows jjhow
jjmany jjitems jjto jjproduce. jjthe jjcash jjbudget jjrequires jjinput jjfrom jjmany jjother jjbudgets
jjand jjis jjone jjof jjthe jjlast jjbudgets jjprepared.
In jja jjmanufacturing jjcompany, jjthe jjbudgets jjfor jjmanufacturing jjcosts, jjincluding jjthe
jjdirect jjmaterials jjbudget, jjthe jjdirect jjlabor jjbudget, jjand jjthe jjmanufacturing jjoverhead
jjbudget jjare jjall jjbased jjon jjthe jj- jjAnswer jjproduction jjbudget
A jjdetailed jjplan jjfor jjthe jjfuture jjthat jjis jjusually jjexpressed jjin jjformal jjquantitative jjterms
jjis jj- jjAnswer jja jjbudget
More jjaccurate jjestimates jjand jjhigher jjmotivation jjare jjgenerally jjthe jjresult jjof jjusing
jja(n) jj- jjAnswer jjparticipative
Reason:
, A.k.a jjSelf-imposed jj(do jjNot jjconfused jjwith jjImposed jjwhich jjis jjtop jjlevel jjimposing
jjgoals jjon jjlower-level). jjA jjself-imposed jjbudget jjis jja jjbudget jjthat jjis jjprepared jjwith jjthe
jjfull jjcooperation jjand jjparticipation jjof jjmanagers jjat jjall jjlevels jjand jjcould jjbe
jjassociated jjwith jjany jjtype jjof jjbudget.
An jjintegrated jjbusiness jjplan jjthat jjformally jjlays jjout jjthe jjcompany's jjgoals jjis jjcalled
jjthe jj- jjAnswer jjmaster jjbudget
Which jjof jjthe jjfollowing jjbudgets jjare jjdirectly jjbased jjon jjinformation jjfrom jjthe jjsales
jjbudget? jj- jjAnswer jj-Production
-Selling jj& jjadministrative jjexpense
Reason:
The jjoverhead jjbudget jjis jjbased jjon jjthe jjnumber jjof jjunits jjto jjbe jjproduced, jjnot jjsold.
jjThe jjdirect jjmaterials jjbudget jjis jjbased jjon jjthe jjnumber jjof jjunits jjto jjbe jjproduced, jjnot
jjsold.
Because jjall jjother jjparts jjof jjthe jjbudget jjdepend jjon jjit, jjif jjthe jj______ jjbudget jjis
jjinaccurate, jjthe jjrest jjof jjthe jjbudget jjwill jjbe jjinaccurate. jj- jjAnswer jjsales
Many jjof jjthe jjschedules jjin jja jjmaster jjbudget jjare jjbased jjon jja jjvariety jjof jjmanagement
jjestimates jjand jjassumptions. jj- jjAnswer jjTrue
Reason:
Managers jjmust jjmake jja jjnumber jjof jjestimates jjand jjassumptions jjwhen jjpreparing jja
jjmaster jjbudget.
In jja jjmanufacturing jjcompany, jjwhich jjbudget jjis jjused jjas jjthe jjbasis jjfor jjcreating jjthe
jjdirect jjmaterials jjbudget, jjthe jjdirect jjlabor jjbudget, jjand jjthe jjmanufacturing jjoverhead
jjbudget? jj- jjAnswer jjProduction
Because jjit jjis jjneeded jjfor jjthe jjschedule jjof jjexpected jjcash jjcollections, jjthe jjannual
jjmaster jjbudget jjfile jjincludes jjthe jj______ jjfrom jjlast jjyear. jj- jjAnswer jjbalance jjsheet
When jjcreating jjan jjExcel jjbudget jjand jjperforming jjwhat-if jjanalysis, jjit jjis jjgenerally
jjeasiest jjto jj- jjAnswer jjcreate jjthe jjbudget jjwith jja jjbudgeting jjassumption jjtab
To jjcalculate jjtotal jjsales jjon jjthe jjsales jjbudget, jjmultiply jjbudgeted jjsales jjin jjunits jjby jj-
jjAnswer jjsales jjprice jjper jjunit
In jja jjmanufacturing jjcompany, jjthe jj______ jjbudget jjshows jjthe jjnumber jjof jjunits jjthat
jjmust jjbe jjmanufactured jjto jjsatisfy jjsales jjneeds jjand jjprovide jjfor jjthe jjdesired jjending
jjinventory. jj- jjAnswer jjproduction
Master jjbudget jjschedules jj- jjAnswer jj-answer jjseveral jjkey jjquestions jjfor jja jjcompany
-are jjbased jjon jjestimates jjand jjassumptions
QUESTIONS WITH COMPLETE
ANSWERS
A jjbudget jjis jja jjdetailed jjplan jjfor jjthe jjfuture jjthat jjis jjusually jjexpressed jjin jjformal
jjqualitative jjterms. jj- jjAnswer jjFalse
Reason:
A jjbudget jjis jjusually jjexpressed jjin jjformal jjquantitative jjterms.
Recognizing jjindividuals jjat jjall jjlevels jjof jjthe jjorganization jjas jjteam jjmembers jjwhose
jjviews jjand jjjudgments jjare jjvalued jjby jjtop jjmanagement jjis jjan jjadvantage jjof jj-
jjAnswer jjself-imposed jjbudgeting
A jjnumber jjof jjseparate, jjbut jjinterdependent, jjbudgets jjthat jjformally jjlay jjout jjthe
jjcompany's jjsales, jjproduction, jjand jjfinancial jjgoals jjare jjcontained jjin jjthe jj- jjAnswer
jjmaster jjbudget
The jjfirst jjstep jjin jjthe jjbudgeting jjprocess jjis jjpreparing jjthe jj- jjAnswer jjsales jjbudget
Reason:
The jjsales jjbudget jjhelps jjdetermine jjhow jjmany jjunits jjneed jjto jjbe jjproduced, jjso jjit jjis
jjprepared jjbefore jjthe jjproduction jjbudget.
The jjdirect jjmaterials jjbudget jjcannot jjbe jjcompleted jjuntil jja jjcompany jjknows jjhow
jjmany jjitems jjto jjproduce. jjthe jjcash jjbudget jjrequires jjinput jjfrom jjmany jjother jjbudgets
jjand jjis jjone jjof jjthe jjlast jjbudgets jjprepared.
In jja jjmanufacturing jjcompany, jjthe jjbudgets jjfor jjmanufacturing jjcosts, jjincluding jjthe
jjdirect jjmaterials jjbudget, jjthe jjdirect jjlabor jjbudget, jjand jjthe jjmanufacturing jjoverhead
jjbudget jjare jjall jjbased jjon jjthe jj- jjAnswer jjproduction jjbudget
A jjdetailed jjplan jjfor jjthe jjfuture jjthat jjis jjusually jjexpressed jjin jjformal jjquantitative jjterms
jjis jj- jjAnswer jja jjbudget
More jjaccurate jjestimates jjand jjhigher jjmotivation jjare jjgenerally jjthe jjresult jjof jjusing
jja(n) jj- jjAnswer jjparticipative
Reason:
, A.k.a jjSelf-imposed jj(do jjNot jjconfused jjwith jjImposed jjwhich jjis jjtop jjlevel jjimposing
jjgoals jjon jjlower-level). jjA jjself-imposed jjbudget jjis jja jjbudget jjthat jjis jjprepared jjwith jjthe
jjfull jjcooperation jjand jjparticipation jjof jjmanagers jjat jjall jjlevels jjand jjcould jjbe
jjassociated jjwith jjany jjtype jjof jjbudget.
An jjintegrated jjbusiness jjplan jjthat jjformally jjlays jjout jjthe jjcompany's jjgoals jjis jjcalled
jjthe jj- jjAnswer jjmaster jjbudget
Which jjof jjthe jjfollowing jjbudgets jjare jjdirectly jjbased jjon jjinformation jjfrom jjthe jjsales
jjbudget? jj- jjAnswer jj-Production
-Selling jj& jjadministrative jjexpense
Reason:
The jjoverhead jjbudget jjis jjbased jjon jjthe jjnumber jjof jjunits jjto jjbe jjproduced, jjnot jjsold.
jjThe jjdirect jjmaterials jjbudget jjis jjbased jjon jjthe jjnumber jjof jjunits jjto jjbe jjproduced, jjnot
jjsold.
Because jjall jjother jjparts jjof jjthe jjbudget jjdepend jjon jjit, jjif jjthe jj______ jjbudget jjis
jjinaccurate, jjthe jjrest jjof jjthe jjbudget jjwill jjbe jjinaccurate. jj- jjAnswer jjsales
Many jjof jjthe jjschedules jjin jja jjmaster jjbudget jjare jjbased jjon jja jjvariety jjof jjmanagement
jjestimates jjand jjassumptions. jj- jjAnswer jjTrue
Reason:
Managers jjmust jjmake jja jjnumber jjof jjestimates jjand jjassumptions jjwhen jjpreparing jja
jjmaster jjbudget.
In jja jjmanufacturing jjcompany, jjwhich jjbudget jjis jjused jjas jjthe jjbasis jjfor jjcreating jjthe
jjdirect jjmaterials jjbudget, jjthe jjdirect jjlabor jjbudget, jjand jjthe jjmanufacturing jjoverhead
jjbudget? jj- jjAnswer jjProduction
Because jjit jjis jjneeded jjfor jjthe jjschedule jjof jjexpected jjcash jjcollections, jjthe jjannual
jjmaster jjbudget jjfile jjincludes jjthe jj______ jjfrom jjlast jjyear. jj- jjAnswer jjbalance jjsheet
When jjcreating jjan jjExcel jjbudget jjand jjperforming jjwhat-if jjanalysis, jjit jjis jjgenerally
jjeasiest jjto jj- jjAnswer jjcreate jjthe jjbudget jjwith jja jjbudgeting jjassumption jjtab
To jjcalculate jjtotal jjsales jjon jjthe jjsales jjbudget, jjmultiply jjbudgeted jjsales jjin jjunits jjby jj-
jjAnswer jjsales jjprice jjper jjunit
In jja jjmanufacturing jjcompany, jjthe jj______ jjbudget jjshows jjthe jjnumber jjof jjunits jjthat
jjmust jjbe jjmanufactured jjto jjsatisfy jjsales jjneeds jjand jjprovide jjfor jjthe jjdesired jjending
jjinventory. jj- jjAnswer jjproduction
Master jjbudget jjschedules jj- jjAnswer jj-answer jjseveral jjkey jjquestions jjfor jja jjcompany
-are jjbased jjon jjestimates jjand jjassumptions
