Chapter 10 Practice Problems 2017

Chapter 10 Practice Problems 2017 - 1 The master budget...

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1. The master budget embraces the impact of a. the differences between the budget and the actual costs, for a given cycle b. operating and managerial decisions. c. operating, managerial, and financing decisions. d. financing and managerial decisions. e. operating and financing decisions. 2. Budgets are advantageous because they a. provide performance criteria, promote goodwill, and save money. b. compel planning that includes the implementation of plans, provide performance criteria, and promote communication and coordination within the organization. c. ensure that the organization meets its goals. d. compel planning that includes the implementation of plans, require organizing, and ensure controlling. e. compel planning that includes the implementation of plans, provide performance criteria, and promote goodwill. 3. Clare's Bears manufactures stuffed bears. The company updates it annual budget every month in order to force management to think about the forthcoming 12 months and not just the current budget. This is an example of a: 4. The first three steps to follow when preparing the operating budget are 5. Unit sales of Product 1 are currently 20,000, while unit sales of Product 2 are double those of Product 1. What will the company's sales forecast be assuming sales of Product 1 increase by 10 percent and those of Product 2 go up by 8,000 units?
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6. For next year Flexsteel Company has budgeted sales of 40,000 units, target ending finished goods inventory of 2,000 units, and a beginning finished goods inventory of 1,200 units. All other inventories are zero. How many units should be produced? a. 39,200 units b. 42,800 units c. 41,800 units d. 40,000 units e. 40,800 units 7. Randy Company has budgeted sales of 12,000 units, target ending finished good inventory of 2,000 units, and a beginning finished goods inventory of 600 units. How many units should be produced?
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