ch13 - ch13 Student 1 A budget is the plan stated in...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
ch13 Student: ___________________________________________________________________________ 1. A budget is the plan, stated in financial terms, of how an organization expects to carry out its activities and meet its goals. True False 2. A master budget consists of (a) organizational goals, (b) strategic long-range profit plan, and (c) tactical short-range profit plan. True False 3. Individual managers' beliefs and expectations are incorporated into the budgeting process using grass roots budgeting procedures. True False 4. Participative budgeting eliminates or reduces the amount of budgetary slack inherent in the budgeting process. True False 5. Sales projections are often the most difficult part of the budgeting process because it involves a considerable amount of subjectivity. True False 6. An organization's sales staff is more likely to provide a lower sales forecast than a forecast provided by market researchers. True False 7. The Delphi technique uses highly sophisticated computerized time series analysis to reduce the subjectivity surrounding the sales forecast. True False 8. The production budget allows management to plan for the resources needed to meet the current sales demand and ensure that inventory levels are sufficient for future sales. True False 9. ABC Company has 10,000 units on hand at the beginning of the year and plans to sell 100,000 units during the year. If the ending inventory needs to be twice the beginning inventory, ABC will need to produce 90,000 units during the year. True False
Image of page 1

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

View Full Document Right Arrow Icon
10. ABC Company wants to have 10,000 units on hand at the end of the year after selling 100,000 units during the year. If the beginning inventory is 5,000 units, ABC needs to produce 105,000 units during the year. True False 11. The production budget must be prepared before the direct materials, direct labor and overhead budgets can be prepared. True False 12. Estimates for direct labor costs are obtained from the engineering and production management, as well as from the Personnel Department. True False 13. Bottlenecks in the production process can be discovered by the budgeting process before they occur. True False 14. In effect, the cash budget simply restates the budgeted income statement to the cash basis. True False 15. The cash budget is normally prepared before the budgeted income statement. True False 16. The sales budget drives the rest of the budgeting process for both manufacturers and merchandisers. True False 17. The production budget is not needed for a service organization. True False 18. Ethical conflicts can occur in the budgeting process because managers supply information for the budgets that are then used to evaluate their performance. True False 19. The use of sensitivity analysis techniques allows managers to ask "what-if" questions regarding budget assumptions and estimates. True False 20. Sensitivity analysis is more likely to be used for sales forecasts than for fixed overhead costs.
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern