GCU ACC 650 Week 5 Quiz
Question no 1
Flexible budgets reflect a company’s anticipated costs based on variations in:
- activity levels.
- inflation rates.
- managers.
- anticipated capital acquisitions.
- standards.
Question no 2
Auditory Company, which applies overhead to production on the basis of machine-hours, reported the following
data for the period just ended:
- Actual units produced: 13,000
- Actual fixed overhead incurred: $742,000
- Standard fixed overhead rate: $15 per hour
- Budgeted fixed overhead: $720,000
- The planned level of machine-hour activity: 48,000
Question no 3
If Auditory estimates four hours to manufacture a completed unit, the company’s fixed overhead budget variance would be:
- $22,000 favorable.
- $22,000 unfavorable.
- $60,000 favorable.
- $60,000 unfavorable.
- None of the answers is correct
Question no 4
Which of the following would have no effect, either direct or indirect, on an organization’s cash budget?
- Sales revenues.
- Outlays for professional labor.
- Advertising expenditures.
- Raw material purchases.
- one of the answers is correct since all of these items would have some influence.
Question no 5
Miracle Enterprises sells electronics in retail outlets and on the Internet. It uses activity-based budgeting in the preparation of its selling, general, and administrative expense budget. Which of the following costs would the company likely classify as a unit-level expense on its budget?
- Media advertisement sales commissions.
- Salaries of web-site maintenance personnel.
- Administrative salaries.
- Salary of the sales manager employed at the store no. 23.
Question no 6
Gallante Inc. began operations in April of this year. It makes all sales on account, subject to the following collection pattern: 30% are collected in the month of sale; 60% are collected in the first month after sale, and 10% are collected in the second month after sale. If sales for April, May, and June were $60,000, $80,000, and $70,000, respectively, what were the firm’s budgeted collections for May?
- $21,000.
- $60,000.
- $69,000.
- $75,000.
- None of the answers is correct.
Question no 7
For an airline, which of the following would not be an operational budget?
- A labor budget for the flight crew.
- A budget of planned air miles to be flown.
- A materials budget for aircraft parts.
- A fuel budget.
- A cash receipts budget of flying consumers.
Question no 8
A company that uses activity-based budgeting performs the following:
- Plans activities for the budget period.
- Forecasts the demand for products and services as well as the customers to be served.
- Budgets the resources necessary to carry out activities.
Question no 9
Which of
the following denotes the proper order of the preceding activities?
- 1-2-3.
- 2-1-3.
- 2-3-1.
- 3-1-2.
- 3-2-1.
Question no 10
Which of the following statements best describes the relationship between the sales-forecasting process and the master-budgeting process?
- The sales forecast is typically completed after completion of the master budget.
- The sales forecast is typically completed approximately halfway through the master-budget process.
- The sales forecast is typically completed before the master budget and has no impact on the master budget.
- The sales forecast is typically completed before the master budget and has little impact on the master budget.
- The sales forecast is typically completed before the master budget and has a significant impact on the master budget.
Question no 11
Maki plans to sell 10,000 units of a particular product during July and expects sales to increase at the rate of 10% per month during the remainder of the year. The June 30 and September 30 ending inventories are anticipated to be 1,100 units and 950 units, respectively. On the basis of this information, how many units should Maki purchase for the quarter ended September 30?
- 31,850.
- 32,150.
- 32,950.
- 33,250.
- None of the answers is correct.
Question no 12
A static budget:
- is based totally on the prior year’s costs.
- is based on one anticipated activity level.
- is based on a range of activities.
- is preferred over a flexible budget in the evaluation of performance.
- presents a clear measure of performance when planned activity differs from actual activity.
STATUS
Question no 13
A flexible budget for 15,000 hours revealed variable manufacturing overhead of $90,000 and fixed manufacturing overhead of $120,000. The budget for 25,000 hours would reveal total overhead costs of:
- $210,000.
- $270,000.
- $290,000.
- $350,000.
- None of the answers is correct.
Question no 14
A manufacturer develops bud¬gets for the direct materials, direct labor, and overhead that will be required in the produc¬tion process from which of the following?
- The selling and administrative expenses budget.
- The budget for merchandise purchases.
- The sales budget.
- The production budget.
- The cash budget.
Question no 15
Which of the following should have the strongest cause and effect relationship with overhead costs?
- Cost followers.
- Non-value-added costs.
- Cost drivers.
- Value-added costs.
- Units of output.
Question no 16
The difference between the revenue or cost projection that a person provides, and a realistic estimate of the revenue or cost, is called:
- passing the buck.
- budgetary slack.
- false budgeting.
- participative budgeting.
- resource allocation processing.
Question no 17
Wu Production Company, which uses activity-based budgeting, is in the process of preparing a manufacturing overhead budget. Which of the following would likely appear on that budget?
- Batch-level costs: Production setup.
- Unit-level costs: Depreciation.
- Unit-level costs: Maintenance.
- Product-level costs: Insurance and property taxes.
- Facility and general operations-level costs: Indirect material.
Question no 18
The sales-volume variance equals:
- (actual sales volume – budgeted sales volume) x actual sales price.
- (actual sales volume – budgeted sales volume) x actual contribution margin.
- (actual sales volume – budgeted sales volume) x budgeted sales price.
- (actual sales price – budgeted sales price) x budgeted sales volume.
- (actual sales price – budgeted sales price) x fixed-overhead volume variance.
Question no 19
Canister Industries uses labor hours to apply variable overhead to production. If the company’s workers were very inefficient during the period, which of the following statements would be true about the variable-overhead efficiency variance?
- The variance would be favorable.
- The variance would be unfavorable.
- The nature of the variance (favorable or unfavorable) would be unknown based on the facts presented.
- The variance would be the same amount as the labor efficiency variance.
- None of the answers is correct.
Question no 20
Solution Enterprises incurred $828,000 of fixed overhead during the period. During that same period, the company applied $845,000 of fixed overhead to production and reported an unfavorable budget variance of $41,000. How much was Solution’s budgeted fixed overhead?
- $787,000.
- $804,000.
- $869,000.
- $886,000.
- Not enough information to judge.
Question no 21
Chong Corporation has a highly automated production facility. Which of the following correctly shows the two factors that would likely have the most direct influence on the company’s manufacturing overhead budget?
- Sales volume and labor hours.
- Contribution margin and cash payments.
- Production volume and management judgment.
- Labor hours and management judgment.
- Management judgment and indirect labor cost.
Question no 22
Nonprofit organizations begin their budgeting process with:
- a sales budget.
- anticipated funding.
- proforma financial statements.
- services to be provided
- a cash budget.
