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Course 171011 - Modern Budgeting for Profit Planning & Control
  Final Exam
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1.   Types of budgets may not include:   (Chapter 1 )

2.   A budget is a financial plan to control future operations and express as dollars, units, hours, or manpower. (Chapter 1 )

3.    Long-term plans should not consider one of the following: (Chapter 2 )

4.   Budget accuracy ratios include:   (Chapter 2 )

5.   Employee performance may be measured by:   (Chapter 2 )

6.   Planning is based on long-term resources allotment and should never be linked to short-term and intermediate goals. T F (Chapter 2 )

7.   A profit plan may be stated in terms of: (Chapter 3 )

8.    Profit plans should always be short-term and for less then a year such as quarterly or semi-annual. T F (Chapter 3 )

9.   The budget reports are not used for:   (Chapter 4 )

10.   The budget sheet should not include:   (Chapter 4 )

11.   The three major types of budget reports are for: planning control, and information. T F (Chapter 4 )

12.   An understanding of cost behavior is helpful to managers for:   (Chapter 5 )

13.   Mixed factory overhead (mixed costs) do not include:   (Chapter 5 )

14.   The high-low method uses two extreme data points to determine the values of ; a (fixed cost portion) and b (variable rate) in the equation:  (Chapter 5 )

15.   The Kramer Company developed a cost function for manufacturing overhead costs of Y = $14,000 + $5x. Estimated manufacturing overhead costs at 20,000 units of production would be (Chapter 5 )

16.   The letter y in the standard regression equation of y = a + bx is best described as the: (Chapter 5 )

17.   In the standard regression equation of y = a + bx, the letter b is best described as the: (Chapter 5 )

18.   The letter a in the standard regression equation of y = a + bx is best described as the: (Chapter 5 )

19.   Mount Company incurred a total cost of $8,600 to produce 400 units of pulp Each unit of pulp required 5 direct labor hours to complete. What is the total fixed costs if the variable cost was $1.50 per direct labor-hour? (Chapter 5 )

20.   The cost systems of most companies fail when it comes to: (Chapter 6 )

21.   Costs control themselves when left unchecked. T F (Chapter 6 )

22.   Typical master budgets include all except: (Chapter 7 )

23.   Selling and administrative expenses don not include: (Chapter 7 )

24.   Which one of the following statements is not true? (Chapter 7 )

25.   A pro forma financial statement: (Chapter 7 )

26.   The starting point in preparing a comprehensive budget for a manufacturing company limited by its ability to produce and not by its ability to sell is a(n): (Chapter 7 )

27.   Jiggy company plans to sell 33,000 units during the month of May. The company plans to have 2,500 units on hand at the end of the month. If 1,200 units are on hand on May 1, how many units must be produced during May? (Chapter 7 )

28.   A budget is a projected or planned income statement. T F (Chapter 7 )

29.   Variance analysis is a tool used to: (Chapter 8 )

30.    Reasons for unfavorable materials variances do not include: (Chapter 8 )

31.   Price variances focus on the difference between (Chapter 8 )

32.   Variance analysis can spotlight positive performance and can be used to reward superior performance by employees. T F (Chapter 8 )

33.   The starting point of the master budget is always the: (Chapter 9 )

34.   The personnel department requires a number of forecasts in planning for human resource which may include trends in: (Chapter 9 )

35.   Sales forecasts are crude estimates and should never be used for budgets, profit planning, or capital expenditure analysis. T F (Chapter 9 )

36.   Manufacturing costs are associated with: (Chapter 10 )

37.   A static budget is geared toward: (Chapter 10 )

38.   Basic steps in preparing a flexible budget do not include: (Chapter 10 )

39.   Advertising and promotion expense budgets can include: (Chapter 11 )

40.   Measures of advertising do not include: (Chapter 11 )

41.   A budget for automobile expenses may be based on (Chapter 11 )

42.   An advertising budget may be developed based on (Chapter 11 )

43.   The marketing budget should never depend on the type of product, service, competition or market share but on what the market will bear. T F (Chapter 11 )

44.   In budgeting salaries there should be included a provision for salary increases, sick leave time, vacations, holidays and fringe benefits. T F (Chapter 12 )

45.   Depreciation on the office equipment would appear in which of the following budgets? (Chapter 12 )

46.   The direct and indirect costs associated with R & D do not include: (Chapter 13 )

47.   The R & D budget may be based on all except: (Chapter 13 )

48.   The manager should not keep track of the following with respect to R & D: (Chapter 13 )

49.   Research and development (R & D) should never be justified on the return obtained or incurred and risks assumed but on the possible potential. T F (Chapter 13 )

50.   A forecast of cash collections and potential write-offs of accounts receivable is essential in: (Chapter 14 )

51.   Nonoperating components of a cash budget do not include: (Chapter 14 )

52.   Which of the following appears in the cash budget? (Chapter 14 )

53.   Budgeting packages include: (Chapter 15 )

54.   The latest generation of budgeting and planning (b&p) software, often known as active financial planning software, are characterized by: (Chapter 15 )

55.   Which of the following represents the best reason for “what-if” (sensitivity) analysis when preparing master budgets? (Chapter 15 )

56.   Factors to consider in determining capital expenditure do not include: (Chapter 16 )

57.   Capital expenditure policy should not take into account: (Chapter 16 )

58.   Capital expenditures do not include replacing machinery to economize on costs. T F (Chapter 16 )

59.   Zero-base budgeting (ZBB) system includes all except: (Chapter 17 )

60.   A decision package will not contain: (Chapter 17 )

61.   Program budgeting includes: (Chapter 17 )

62.   Zero Based budgeting requires managers to: (Chapter 17 )

63.   Zero base budgeting (ZBB) is a priority form of budgeting ranking activities such as products and services. T F (Chapter 17 )

64.   An objective of zero-based budgeting is to base the current year's budget on the expenditures of the previous year (Chapter 17 )

65.   The major feature of zero-based budgeting (ZBB) is that it questions each activity and determines whether it should be maintained as it is, reduced, or eliminated. T/F (Chapter 17 )

66.   Which one of the following statements is not true? (Chapter 18 )

67.   Service industries can include all except: (Chapter 18 )

68.   Which of the following budgets are identical in a service firm? (Chapter 18 )

69.   Planning and control are critical functions in all business, whether they produce and sell goods or provide services. T F (Chapter 18 )

70.   Government funds do not include: (Chapter 19 )

71.   Interfund transactions that are not loans or advances, reimbursements, or quasi-external transactions are classified as: (Chapter 19 )

72.   Which of the following organizations would be most likely to use budgets to authorize expenditure of funds? (Chapter 19 )

73.   Nonprofit organizations include voluntary support organizations, governments and state schools, and community-based organizations. T F (Chapter 19 )

74.   Gold County received goods that had been approved for purchase but for which payment had not yet been made. Should the accounts listed below be decreased? (Chapter 19 )

75.   The estimated revenues control account of a governmental unit is credited when (Chapter 19 )