Which of the following is not correct regarding the manufacturing overhead budget?
A.Total budgeted cash disbursements for manufacturing overhead...
Which of the following statements is not correct?
Which of the following statements is not correct?
A. The sales budget is the starting point in preparing the master budget.
B. The sales budget is...
Which of the following represents the correct order in which the indicated budget documents for a manufacturing company would be prepared?
Which of the following represents the correct order in which the indicated budget documents for a manufacturing company would be prepared?
A. Sales...
In the selling and administrative budget, the non-cash charges (such as depreciation) are added to the total budgeted selling and administrative expenses to determine the expected cash disbursements for selling and administrative expenses.
In the selling and administrative budget, the non-cash charges (such as depreciation) are added to the total budgeted selling and administrative expenses...
Both variable and fixed manufacturing overhead costs are included in the manufacturing overhead budget.
Both variable and fixed manufacturing overhead costs are included in the manufacturing overhead budget.
Answer: TR...
The cash budget is developed from the budgeted income statement.
The cash budget is developed from the budgeted income statement.
a. True
b. False
Answer: ...
If the actual level of activity is 4% more than planned, then the fixed costs in the static budget should be increased by 4% before comparing them to actual costs.
If the actual level of activity is 4% more than planned, then the fixed costs in the static budget should be increased by 4% before comparing them to...
If the actual level of activity is 4% less than planned, then the costs in the static budget should be reduced by 4% before comparing them to actual costs.
If the actual level of activity is 4% less than planned, then the costs in the static budget should be reduced by 4% before comparing them to actual...
A static planning budget is suitable for planning and for evaluating how well costs are controlled.
A static planning budget is suitable for planning and for evaluating how well costs are controlled.
a. True
b. False
Answer: ...
It may be easier to control fixed costs than variable costs.
It may be easier to control fixed costs than variable costs.
a. True
b. False
Answer: ...
A flexible budget performance report should contain fixed as well as variable and mixed.
A flexible budget performance report should contain fixed as well as variable and mixed.
a. True
b. False
Answer: ...
A favorable spending variance occurs when the actual cost is less than the amount of that cost in the flexible budget.
A favorable spending variance occurs when the actual cost is less than the amount of that cost in the flexible budget.
a. True
b. False
...
When the activity measure is the number of units sold, the revenue variance is unfavorable if the average actual selling price is less than expected.
When the activity measure is the number of units sold, the revenue variance is unfavorable if the average actual selling price is less than expected.
a....
A revenue variance is unfavorable if the actual revenue is less than what the revenue should have been for the actual level of activity for the period.
A revenue variance is unfavorable if the actual revenue is less than what the revenue should have been for the actual level of activity for the period.
a....
The ____ sheet is used to accumulate the indirect costs in each department that cannot be charged to specific jobs.
The ____ sheet is used to accumulate the indirect costs in each department that cannot be charged to specific jobs.
Answer: Departmental Overhead...
A materials ledger card serves as a(n) __________ record.
A materials ledger card serves as a(n) __________ record.
Answer: perpetual invento...
The protection and identification of materials and the keeping of records are the responsibility of the ______________________.
The protection and identification of materials and the keeping of records are the responsibility of the ______________________.
Answer: storeroom...
The general ledger Raw Materials account controls the _______.
The general ledger Raw Materials account controls the _______.
Answer: Material Ledg...
The costs of materials issued from the storeroom are summarized in the ______.
The costs of materials issued from the storeroom are summarized in the ______.
Answer: Material Requisition Journ...
A bill of materials Is sometimes used as a materials requisition.
A bill of materials Is sometimes used as a materials requisition.
Answer: True
...
A materials requisition is used to authorize the purchase of direct materials.
A materials requisition is used to authorize the purchase of direct materials.
Answer: Fal...
The cost of indirect materials used is charged directly to the specific job.
The cost of indirect materials used is charged directly to the specific job.
Answer: Fal...
The return shipping order authorizes the return of materials to the supplier.
The return shipping order authorizes the return of materials to the supplier.
Answer: Tr...
The return of materials to the supplier is recorded in the returned materials journal.
The return of materials to the supplier is recorded in the returned materials journal.
Answer: Fal...
At the end of the period, the balance of the Raw Materials account should equal the total of the balances (dollar amount) on the materials ledger cards.
At the end of the period, the balance of the Raw Materials account should equal the total of the balances (dollar amount) on the materials ledger c...
The On Order column of the materials ledger card shows the number of units reserved for job orders to be manufactured.
The On Order column of the materials ledger card shows the number of units reserved for job orders to be manufactured.
Answer: Fal...
It is not necessary to record the cost of unused materials returned to the storeroom on the job cost sheet or the departmental overhead analysis sheet.
It is not necessary to record the cost of unused materials returned to the storeroom on the job cost sheet or the departmental overhead analysis sh...
Materials returned to the storeroom are recorded at current market price.
Materials returned to the storeroom are recorded at current market price.
Answer: Fal...
A general journal entry is made to correct the Vouchers Payable account for materials shipped back to the supplier.
A general journal entry is made to correct the Vouchers Payable account for materials shipped back to the supplier.
Answer: Fal...
The return of materials to the storeroom is recorded on the materials ledger card by an entry in parentheses or brackets in the issued column.
The return of materials to the storeroom is recorded on the materials ledger card by an entry in parentheses or brackets in the issued column.
An...
Materials returned to the supplier are recorded on the materials ledger card by an entry in the issued column.
Materials returned to the supplier are recorded on the materials ledger card by an entry in the issued column.
Answer: Fal...
When the materials ledger is maintained, an identifying number is given to each type of material in the inventory.
When the materials ledger is maintained, an identifying number is given to each type of material in the inventory.
Answer: Tr...
The issuance of direct materials requires preparation of a materials requisition; the Issuance of indirect materials does not.
The issuance of direct materials requires preparation of a materials requisition; the Issuance of indirect materials does not.
Answer: Fal...
A properly filled out materials requisition indicates the job number or the department to which the cost should be charged.
A properly filled out materials requisition indicates the job number or the department to which the cost should be charged.
Answer: Tr...
A materials ledger card is kept for each type of material on hand.
A materials ledger card is kept for each type of material on hand.
Answer: Tr...
All the bin tags together form the materials ledger.
All the bin tags together form the materials ledger.
Answer: Fal...
A good internal control principle requires that only authorized personnel be permitted to enter the storeroom.
A good internal control principle requires that only authorized personnel be permitted to enter the storeroom.
Answer: Tr...
Internal control procedures are applied to cash only and are not applied to the storage and issuance of materials.
Internal control procedures are applied to cash only and are not applied to the storage and issuance of materials.
Answer: Fal...
The purchasing unit receives a copy of the receiving report for comparison with the purchase order and the supplier's invoice.
The purchasing unit receives a copy of the receiving report for comparison with the purchase order and the supplier's invoice.
Answer: Tr...
A purchase requisition for an unusual quantity or for a nonstandard material may be initiated by the factory line supervisor or by the production manager.
A purchase requisition for an unusual quantity or for a nonstandard material may be initiated by the factory line supervisor or by the production m...
It is customary to check or test the quality of materials received.
It is customary to check or test the quality of materials received.
Answer: Tr...
Purchase orders need not be issued for orders placed by telephone.
Purchase orders need not be issued for orders placed by telephone.
Fal...
Prenumbering purchase orders is a step to achieving internal control of materials.
Prenumbering purchase orders is a step to achieving internal control of materials.
Answer: Tr...
A purchase order should be issued to cover each purchase of supplies.
A purchase order should be issued to cover each purchase of supplies.
Answer: Tr...
The _______ lists all materials needed for a job and the date needed.
The _______ lists all materials needed for a job and the date needed.
Answer: bill of materia...
The _______ is responsible for buying materials in correct quantities at the most economical price.
The _______ is responsible for buying materials in correct quantities at the most economical price.
Answer: purchasing age...
The _______ is written authority to the supplier to ship specified materials.
The _______ is written authority to the supplier to ship specified materials.
Answer: purchase ord...
Raw materials received in the storeroom are recorded on _______ by the storeroom clerk.
Raw materials received in the storeroom are recorded on _______ by the storeroom clerk.
Answer: material ledger ca...
The daily usage multiplied by the lead time, plus the ______ is equal to the _______ .
The daily usage multiplied by the lead time, plus the ______ is equal to the _______ .
Answer: safety stock, reorder poi...
Some companies prepare additional copies of the ______ to serve as the receiving report.
Some companies prepare additional copies of the ______ to serve as the receiving report.
Answer: Purchase Ord...
The storeroom supervisor issues a(n) ______ then the quantity on hand of a standard material reaches the predetermined reorder point.
The storeroom supervisor issues a(n) ______ then the quantity on hand of a standard material reaches the predetermined reorder point.
Answer: Purchase...
Which of the following budgets are prepared at the beginning of the period for one set level of activity?
Which of the following budgets are prepared at the beginning of the period for one set level of activity?
a. Activity variance budgets
b. Static...
The ________ is common for both a merchandising company and a manufacturing company.
The ________ is common for both a merchandising company and a manufacturing company.
a. selling and administrative expenses budget
b. purchases budget
c....
Budgeted financial statements:
Budgeted financial statements:
a. allows managers to determine the effects of their budgeting decisions on their compensation.
b. allows managers...
Beginning cash balance along with the cash receipts from sales is called ________ in a summary cash budget.
Beginning cash balance along with the cash receipts from sales is called ________ in a summary cash budget.
a. ending cash balance
b. total cash available
c....
Which of the following budgets includes cash outflows toward materials, salaries and other labor costs, and overhead expenditures?
Which of the following budgets includes cash outflows toward materials, salaries and other labor costs, and overhead expenditures?
a. Direct cost...
Which of the following budgets is the materials purchases budget based on?
Which of the following budgets is the materials purchases budget based on?
a. Direct labor budget
b. Selling and administrative expense budget
c....
When preparing the monthly production budget, the desired ending inventory of August is:
When preparing the monthly production budget, the desired ending inventory of August is:
a. the beginning inventory for August.
b. the beginning...
The usual starting point when developing a sales forecast is:
The usual starting point when developing a sales forecast is:
a. competitor's budget information.
b. last year's level of sales.
c. the cash budget.
d....
Which budgeting process starts with departmental managers and flows up through middle management and then to top management?
Which budgeting process starts with departmental managers and flows up through middle management and then to top management?
a. Master budgeting
b....
Which of the following accurately describes planning?
Which of the following accurately describes planning?
a. They involve developing objectives and goals for the organization.
b. They involve day-to-day...
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