1.The video mentioned that the master budget starts by preparing which of the following?
A) Sales budget
2.Which of the following definitions appeared in this video?
A) A budget is a detailed plan for the future that is usually expressed in formal quantitative terms.
3.Which of the following is not one of the advantages of using a self-imposed budget?
A) It enables front-line managers to create budgetary slack.
4.Which of the following is the definition of control that is mentioned in the video?
A) The process of gathering feedback to ensure that a plan is being properly executed or modified as circumstances change.
5.Which of the following is not one of the key estimates/assumptions underlying the sales budget and the schedule of expected cash collections?
A) Estimating each month’s desired ending inventory as a percentage of sales.
6.The budgeted sales dollars from the sales budget plug into which of the following?
A) The income statement
7.The production budget focuses on which of the following?
A) Units of finished goods
8.The first line of the production budget is:
A) Budgeted unit sales
9.Which of the following equations is mathematically correct?
A) Units of raw materials needed to meet production + Desired ending raw materials inventory − Beginning raw materials inventory = Total units of raw material needed Correct
10.The problem discussed in the video introduced an extra assumption to enable computing:
A) Cash paid for raw materials purchases
11.The first line of the direct labor budget is:
A) Units to be produced
12.The video mentioned which of the following simplifying assumptions with respect to the direct labor budget?
A) The direct labor cost incurred and the cash paid to direct laborers will always be the same in each period.
13.Which of the following is the three-step progression for creating the manufacturing overhead budget that was discussed in this video?
A) First, calculate the variable manufacturing overhead, then add in the fixed manufacturing overhead and finally subtract the depreciation on factory assets.
14.Which of the following is used in the numerator of the budgeted manufacturing overhead rate?
A) The total manufacturing overhead cost incurred
15.The first line of the selling and administrative expense budget is:
A) budgeted unit sales.
16.The selling and administrative expense budget adds back:
A) depreciation on non-factory assets.
17.Which of the following statements is true?
A) We assume that all borrowing occurs on the first day of the month and all repayments of principal occur on the last day of the month.
18.Which of the following equations is mathematically correct?
A) Beginning cash balance + cash receipts − cash disbursements = excess (deficiency) of cash available over disbursements
19.Which of the following expenses explains the difference between the net operating income and net income in the example described in the video?
A) Interest expense
20.What income statement format was used in the example described in the video?
A) Absorption costing format
21.Which of the following equations is correct?
A) Beginning retained earnings + net income − dividends = ending retained earnings
22.The example discussed in the video concluded by calculating which of the following account balances?
A) Cash
23.The example in the video related to which of the following?
A) Unloading luggage from an airplane
24.Which of the following was not discussed in the video?
A) Direct materials variances
25.Which of the following is the key difference between a planning budget and a flexible budget?
A) The planning budget is based on the budgeted level of activity and the flexible budget is based on the actual level of activity.
26.In the Larry’s Lawn Service example:
A) the actual number of lawns mowed was greater than the planned number of lawns mowed.
27.Activity variances are calculated by comparing:
A) the amounts in the flexible budget to the amounts in the planning budget.
28.If the actual level of activity exceeds the planned level of activity, then:
A) any variable expense will have an unfavorable activity variance.
29.Spending variances are calculated by comparing:
A) the amounts in the flexible budget to the actual amounts.
30.Which of the following statements is true?
A) If actual revenue is greater than the revenue in the flexible budget, then the variance is favorable; however, if an actual expense exceeds the amount in the flexible budget, then the variance is unfavorable.
31.Which of the following statements is true?
A) The performance report described in the video included a flexible budget and a planning budget.
32.The performance report described in the video compares actual results to the:
A) flexible budget.
33.When using more than one cost driver we compute:
A) revenue and spending variances as well as well as activity variances.
34.Which of the following statements is true with respect to cost and revenue formulas?
A) They are used to calculate planning budgets and flexible budgets.
35.The difference between column 2 (AH × SR) and column 3 (SH × SR) is the:
A) variable overhead efficiency variance.
36.The variable overhead allocation base in the example discussed in the video was:
A) direct labor-hours.
37.Which of the following correctly describes fixed manufacturing overhead application in a standard costing system?
A) Standard hours allowed for actual output × Predetermined overhead rate
38.The fixed overhead volume variance is computed by comparing:
A) the budgeted fixed overhead to the fixed overhead applied to work in process.
39.The Work in Process account is always increased by:
A) SQ × SP
40.Any transaction that affects the income statement should be recorded in which of the following columns?
A) Retained earnings