ACCT 201B Practice Problems for Exam 1 PDF

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Total of 29 practice problems for exam 1. Including conceptual and word problems and calculation involved....

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1. Developing goals and preparing various budgets to achieve those goals is part of ________ a. Responsibility accounting b. Control c. The budget period d. Planning 2. A budget that keeps managers focused at least one year ahead is a continuous or _______ a. Perpetual 3. Budgets_______ a. Provide each department with the same amount of money to spend, so that all departments are treated fairly b. The budgeting process can uncover potential bottlenecks before they occur c. Define goals and objectives that can serve as benchmarks for evaluating subsequent performance d. Coordinate the activities of the entire organization by integrating the plans of its various parts e. Force managers to think about and plan for the future 4. When a manager creates a budget that is too easy to attain, _______ occurs a. Budgetary slack b. Perpetual budgeting c. Self-imposted budgeting d. Participative budgeting 5. The number of working hours required to satisfy the production budget is shown on the _________ _________ budget a. Direct labor 6. In a manufacturing company, the ______ _____ budget details the raw materials that must be purchased to fulfill the production budget and to provide for adequate inventories a. Direct material 7. The cost of unsold units is computed on the _______ budget a. Ending finished goods inventory b. Production c. Sales d. Manufacturing overhead 8. Risks of not knowing in advance how much labor time will be needed throughout the budget period includes a. Excessive inventory levels b. Low employee morale c. Erratic layoffs d. Labor shortages 9. A detailed plan for the future that is usually expressed in formal quantitative terms is a(n) _____ a. Budget 10. The receipts, disbursements, excess or deficiency, and financing section are all parts of the _____ budget a. Production b. Selling and administrative expense

c. Sales d. Cash 11. A number of separate, but interdependent, budgets that formally lay out the company’s sales, production, and financial goals are contained in the ______ budget a. Master 12. In large organizations, many smaller individual budgets submitted by department heads and other responsible people comprise the _____ budget a. Selling and administrative b. Manufacturing overhead c. Cash d. Ending finished goods inventory 13. When profit targets are set by top managers, _______ a. Goals may be unrealistically high b. Too much slack may be allowed c. Strategic direction may be insufficient waste may occur d. Waste may occur e. Employee motivation will increase 14. The first step in the budgeting process is the preparation of the _____ budget a. Sales 15. Which of the following budgets shows the company’s planned profit and serves as a benchmark against which subsequent company performance can be measured? a. Budgeted income statement b. Budgeted balance sheet c. Budgeted selling and administrative expenses d. Manufacturing overhead budget 16. All costs of production other than direct materials and direct labor are shown on the ______ _____ a. Manufacturing overhead 17. In a manufacturing company, the _____ budget shows the number of units that must be manufactured to satisfy sales needs and provide for the desired ending inventory a. Sales b. Cash c. Production d. Direct materials 18. Which of the following budgets are needed to calculate unit product costs? a. Manufacturing overhead b. Selling and administrative c. Direct materials d. Direct labor e. Cash 19. Gathering feedback to ensure that the plan is being followed is referred to as ______ a. Control

20. Recognizing individuals at all levels of the organization as team members whose views and judgments are valued by top management is an advantage of _______ a. Responsibility accounting b. Self-imposed budgeting c. Continuous budgeting d. A sale budget 21. Which of the following is needed to calculate raw materials to be purchased on the direct materials budget? a. Raw materials required per unit b. Budgeted unit sales c. Beginning inventory of raw materials d. Ending finished goods inventory 22. A detailed plan for the future that is usually expressed in formal quantitative terms is a(n)_____ a. Budget 23. Payments for direct materials, direct labor, and manufacturing overhead costs are all listed in the _____ section of the cash budget a. Cash excess or deficiency b. Financing c. Receipts d. Disbursements 24. The purpose of a budget should be to: a. Measure operating results b. Establish goals c. Pressure managers to meet targets d. Isolate areas needing attention 25. Developing goals for the budget is ______, while _____ involves steps taken to ensure that steps towards meeting the goal are being followed a. Planning // control 26. Borrowing money is required whenever_____ a. The cash excess equals the minimum required cash balance b. There is a cash deficiency c. The cash excess is less than the minimum required cash balance d. The cash excess is greater than the minimum required cash balance 27. What is added to the variable selling and administrative expenses to get the total selling and administrative expenses? a. Direct materials b. Fixed selling and administrative expenses c. Non-cash selling and administrative expenses d. Merchandise purchases 28. To calculate total sales on the sales budget, multiplying budgeted sales in units by_____ a. Sales price per unit b. Number of unit c. Budgeted unit sales

29. Davidson corporation’s master budget shows expected direct labor cost of $90,000 for the month of May. During May, the company’s expected sales equal 12,000 units and expected production is15,000 units. If each unit requires ½ hour of direct labor, the budgeted direct labor rate is $_________ a. 12...