Ch678QuizKEY.docVIP

1. Budgeting is used to help companies: a. plan to better satisfy customers b. anticipate potential problems c. focus on opportunities *d. All of these answers are correct. 2. Financing decisions PRIMARILY deal with: a. the use of scarce resources *b. how to obtain funds to acquire resources c. acquiring equipment and buildings d. preparing financial statements for stockholders 3. A good budgeting system forces managers to examine the business as they plan, so they can: a. detect inaccurate historical records *b. set specific expectations against which actual results can be compared c. complete the budgeting task on time d. get promoted for doing a good job 4. For next year, Galliart, Inc., has budgeted sales of 60,000 units, target ending finished goods inventory of 3,000 units, and beginning finished goods inventory of 1,800 units. All other inventories are zero. How many units should be produced next year? a. 58,800 units b. 60,000 units *c. 61,200 units d. 64,800 units 60,000 + 3,000 – 1,800 = 61,200 units 5. The master budget is: a. a flexible budget *b. a static budget c. developed at the end of the period d. based on the actual level of output 6. Management by exception is the practice of concentrating on: a. the master budget *b. areas not operating as anticipated c. favorable variances d. unfavorable variances 7. The following items are the same for the flexible budget and the master budget EXCEPT the same: a. variable cost per unit b. total fixed costs *c. units sold d. sales price per unit 8. A favorable efficiency variance for direct materials might indicate: a. that lower-quality materials were purchased *b. an overskilled workforce c. poor design of products or processes d. a lower-priced supplier was used 9. An unfavorable efficiency variance for direct manufacturing labor might indicate that: a. work was efficiently scheduled *b. machines were not properly main