Name: MBA 5130 HEAL TAKE HOME QUIZ #4 CHAPTER 9 Using capital letters please wri

Question

Name: MBA 5130 HEAL TAKE HOME QUIZ #4 CHAPTER 9 Using capital letters please write the correct answer on the blank to the left of each question. Each question is worth one (1) point for a total of twenty (20) points. The exam is due at the beginning of class on 11/1517 Which of the following statements is true? A) Budgets formalize managers' expectations regarding sales, prices, and B) All businesses should prepare budgets C) Even small businesses and nonprofit entities can benefit from the planning and control provided by budgets. D) Budgets are financial plans for the future and are a key component of planning E) All of the above. 2. Which statement below is FALSE? A) A master budget can be divided into operating and financial budgets. B) Operating budgets describe the income-generating activities of a firm: sales, production, and finished goods inventories. C) Financial budgets detail the inflows and outflows of cash and the overall financial position. D) The financial budget is prepared before the operating budget E) The controller usually serves as the budget director, the person responsible for directing and coordinating the organization's overall budgeting process. 3. A company is planning to sell 2,000 chairs for the first quarter Desired ending inventory is 200 chairs, and beginning inventory is 300 chairs. How many chairs need to be produced during this quarter? A) 1,900. B) 2,000 C) 2,100. D) 2,500 E) None of the answers is correct 4. The sales budget forecasts: A) The selling price per unit B) The total expected sales in units. C) The total expected sales in dollars. D) Seasonal fluctuations in sales E) All of the answers are correct

Explanation / Answer

1. (E) All of the above
2. (D) As Operating budgets are prepared first and the information from Operating budget is used to prepare financial budget.
3. (A) Chairs to be produced = Planned Sales + Closing Inventory - Opening Inventory = 2000 + 200 - 300 = 1,900.
4. (E) All of the answers are correct.
5. (D)
6. (C) Salses Budget is a component of Operating Budget.
7. (A) Direct Labour Budget.
8. (D) Depreciation is a non-cash item and not included in Cash Budget.
9. (A) True. Managers are held responsible for Budget Variances.
10.(B) False. Strategic Plan plots a direction for future.

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