Chap007 - Chapter 07 - Profit Planning Chapter 07 Profit...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Chapter 07 - Profit Planning Chapter 07 Profit Planning True / False Questions 1. The cash budget is developed from the budgeted income statement. True False 2. The usual starting point in budgeting is to make a forecast of cash receipts and cash disbursements. True False 3. Budgets are used for planning rather than for control of operations. True False 4. Self-imposed budgets are those that are prepared by top management and then assigned to other managers within the organization. True False 5. One of the distinct advantages of a budget is that it can help to uncover potential bottlenecks before they occur. True False 6. A self-imposed budget can be a very effective control device in an organization. True False 7. A production budget is to a manufacturing firm as a merchandise purchases budget is to a merchandising firm. True False 7-1 Chapter 07 - Profit Planning 8. In the merchandise purchases budget, the required purchases (in units) for a period can be determined by subtracting the beginning merchandise inventory (in units) from the budgeted sales (in units). True False 9. When preparing a materials purchase budget, desired ending inventory is deducted from total needs of the period to arrive at materials to be purchased. True False 10. In companies that have "no lay-off" policies, the total direct labor cost for a budget period is computed by multiplying the total direct labor hours needed to make the budgeted output of completed units by the direct labor wage rate. True False 11. If the expected level of activity is appreciably above or below the company's present capacity, it may be desirable to adjust fixed costs in the budget. True False 12. In the manufacturing overhead budget, the non-cash charges (such as depreciation) are added to the total budgeted manufacturing overhead to determine the expected cash disbursements for manufacturing overhead. True False 13. In the selling and administrative budget, the non-cash charges (such as depreciation) are deducted from the total budgeted selling and administrative expenses to determine the expected cash disbursements for selling and administrative expenses. True False 7-2 Chapter 07 - Profit Planning 14. The beginning cash balance is not included on the cash budget because the cash budget deals exclusively with cash flows rather than with balance sheet amounts. True False Multiple Choice Questions 15. The materials purchase budget: A. is the beginning point in the budget process. B. must provide for desired ending inventory as well as for production. C. is accompanied by a schedule of cash collections. D. is completed after the cash budget. 16. The budget or schedule that provides necessary input data for the direct labor budget is the: A. raw materials purchases budget....
View Full Document

This note was uploaded on 05/03/2011 for the course ACC 1410 taught by Professor Bauser during the Spring '11 term at Marion Technical College.

Page1 / 165

Chap007 - Chapter 07 - Profit Planning Chapter 07 Profit...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online