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St. Leo ACC 202 Principles of Accounting II Accounting Test 6




Question;a1. Question: A planning budget based on a single predicted amount of sales or production volume is called a: Sales budget. Standard budget. Flexible budget. Fixed budget. Variable budget.2. Question: Product A has a sales price of $10 per unit. Based on a 10,000-unit production level, the variable costs are $6 per unit and the fixed costs are $3 per unit. Using a flexible budget for 12,500 units, what is the budgeted operating income from Product A? Student Answer: $12,500. $25,000. $20,000. $30,000. $35,000. 3. Question: A plan that lists the types and amounts of selling expenses expected during the budget period is called a(n): Student Answer: Sales budget. Operating budget. Capital expenditures budget. Selling expense budget. Purchases budget.4. Question: A comprehensive or overall formal plan for a business that includes specific plans for expected sales, the units of product to be produced, the merchandise or materials to be purchased, the expense to be incurred, the long-term assets to be purchased, and the amounts of cash to be borrowed or loans to be repaid, as well as a budgeted income statement and balance sheet, is called a: Student Answer: Master budget. Cash budget. Capital expenditures budget. Rolling budget. Production budget. 5. Question: Which of the following is a benefit derived from budgeting? Student Answer: Budgeting focuses management's attention on the future. Budgeting provides coordination of departments. Budgeting provides a basis for evaluating performance. Budgeting provides motivation for managers and employees. All of these.6. Question: The master budget process usually ends with: Student Answer: The production budget. The sales budget. The selling expense budget. The budgeted balance sheet. The overhead budget.7. Question: Big Company manufactures keyboards. Management wishes to develop budgets for the upcoming quarter based on the following data:Compute the budgeted quantity of plastic which needs to be purchased for the next quarter. Student Answer: 850 ounces. 3,348 ounces. 3,452 ounces. 798 ounces. 902 ounces.8. Question: The practice of preparing budgets for each of several future periods and revising those budgets as each period is completed, adding a new budget each period so that the budgets always cover the same number of future periods, is called: Student Answer: Participatory budgeting. Capital budgeting. Balanced budgeting. Continuous budgeting. Primary budgeting.9. Question: A plan that lists the types and amounts of general and administrative expenses expected during the budget period is referred to as a: Student Answer: General and administrative expense budget. Sales budget. Cash payments budget. Overhead budget. Selling expense budget.10. Question: Operating budgets include all the following budgets except the: Student Answer: Sales budget. Selling expense budget. Cash budget. Merchandise purchases budget. General and administrative expense budget.11. Question: Bradford Company budgeted 4,000 pounds of material costing $5.00 per pound to produce 2,000 units. The company actually used 4,500 pounds that cost $5.10 per pound to produce 2,000 units. What is the direct materials price variance? Student Answer: $ 400 unfavorable. $ 450 unfavorable. $2,500 unfavorable. $2,550 unfavorable. $36,000 unfavorable. 12. Question: Lingstat Company is trying to decide how many units of merchandise to order each month. The company's policy is to have 15% of the next month's sales in inventory at the end of each month. Projected sales for August, September, and October are 5,000 units, 6,000 units, and 4,000 units, respectively. How many units must be purchased in September? Student Answer: 6,600. 6,150. 5,850. 5,700. 6,300.13. Question: Barrett's Fashions forecasts sales of $125,000 for the quarter ended December 31. Its gross profit rate is 20% of sales, and its September 30 inventory is $32,500. If the December 31 inventory is targeted at $41,500, budgeted purchases for the fourth quarter should be: $134,000. $109,000. $ 91,500. $ 25,000. $ 91,000.14. Question: Adams, Inc., uses the following standard to produce a single unit of its product: Overhead (2 hrs. @ $3/hr.) = $6The flexible budget for overhead is $100,000 plus $1 per direct labor hour. Actual data for the month show overhead costs of $150,000 based on 24,000 units of production. The overhead volume variance is: Student Answer: $10,000 favorable. $12,000 favorable. $ 4,000 unfavorable. $16,000 unfavorable. $36,000 unfavorable.15. Question: A managerial accounting report that presents predicted amounts of the company's revenues and expenses for the budget period is called a: Student Answer: Budgeted income statement. Budgeted balance sheet. Master plan. Rolling income statement. Continuous income statement.


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