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I-Asgn7 - LESSON 7 Assignment Question 1(15 marks a(5 marks...

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LESSON 7 Assignment Question 1 (15 marks) a. (5 marks) What is a budget? What is budgetary control? b. (5 marks) Discuss some of the major benefits to be gained from budgeting. c. (5 marks) What is a self-imposed budget? What are the major advantages of self-imposed budgets? What caution must be exercised in their use? Question 2 (12 marks) Multiple choice (1 mark each) a. What is the document called in which all budgets in an organization are grouped? 1) The balance sheet 2) The master balance 3) The master budget 4) The flexible budget b. What is the ultimate role of budgets? 1) Planning the fixed and variable costs 2) Planning, controlling, and measuring performance 3) Planning the next period operations 4) Controlling the allocation of the organizational resources c. When is a budget a motivational tool to employees? 1) When they participate in the preparation process of the budget 2) When a reward system is linked to performance 3) When the budget promotes respect and fairness 4) All of the above d. A good budgeting system should be able to force managers to do which of the following? 1) Detect easily minor and major inefficiencies 2) Reward all employees for their performance 3) Control for the use of financial resources 4) Maximize profits Management Accounting Fundamentals Assignment 7 1
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e. What are the two opposite views of how to develop a master budget? 1) Participative budgets versus collaborative budgeting 2) Top-down versus bottom-up budgeting 3) Flexible versus rigid budgeting 4) Planning versus control budgeting f. What is the focus of the master budget? 1) Operational decisions 2) Financial decisions 3) Operational and financial decisions 4) Operational, managerial, and financial decisions g. What is the role of the budgeted income statement? 1) It summarizes the final result of all the operation budgets. 2) It computes the cost of performing activities. 3) It assigns assigning costs to cost objects. 4) It shows the financial position of the company. h. Financial budgets include which of the following? 1) Budgeted income statement, cash budget, sales budget, budgeted balance sheet, and budgeted statement of cash flows 2) Budgeted income statement, capital budget, sales budget, budgeted balance sheet, and budgeted statement of cash flows 3) Budgeted income statement, cash budget, capital budget, and budgeted statement of cash flows 4) Budgeted income statement, capital budget, cash budget, budgeted balance sheet, and budgeted statement of cash flows i. Which of the following types of manufacturing costs is NOT included in the overhead budget ?
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