Managerial Accounting BY Stacey Whitecotton 4TH Edition-Test Bank

Managerial Accounting BY Stacey Whitecotton 4TH Edition-Test Bank

Managerial Accounting, 4e (Whitecotton)
Chapter 8 Budgetary Planning

1) Control is a forward-looking process while planning is a backward-looking one.

2) The budget translates a company’s objectives into financial terms.

3) An advantage of budgeting is that it provides a benchmark for evaluating performance.

4) One advantage of participative budgeting is managers can build in budgetary slack.

5) Participative budgeting allows employees throughout the organization to have input into the budget-setting process.

6) Participative budgeting is more likely to motivate people to work toward the organization’s goals than is a top-down approach.

7) Operating budgets focus on the financial resources needed to support operations.

8) The production budget must be prepared before the sales budget can be prepared.

9) Preparing the sales budget includes calculating the revenues to be earned from units sold in addition to the number of units to be sold.

10) If a company produces and sells goods to order, the sales budget and production budget are identical.

11) Manufacturing firms prepare a separate direct materials purchases budget for each material used in production.

12) The direct labor budget is based on budgeted sales levels.

13) Budgeted manufacturing overhead includes indirect manufacturing costs, but not selling or administrative costs.

14) The selling and administrative expense budget is based on the production budget.

15) Budgeted cash collections are based on the sales budget.

16) Which of the following is the forward-looking phase of the planning and control cycle?
A) Planning
B) Directing/Leading
C) Organizing
D) Control

17) Creating a budget is an important part of which phase of the planning and control process?
A) Planning
B) Controlling
C) Implementing
D) Executing