14-1
Chapter 14 Cost Planning Answer Key
Multiple Choice Questions
1.
An example of a committed cost is:
2.
Which of the following is
not
a strong reason for budgeting?
14-2
3.
The budgeting process that most likely creates an attitude supportive of achieving
organization goals is:
4.
A budgeting approach that implies little or no input from lower levels of management is
known as the:
14-3
5.
Budget slack is:
6.
Zero-based budgeting forces managers to:
14-4
7.
A budget that is prepared for several periods in the future, then revised several times prior
to the budget period is called a:
8.
A budget that has been prepared only once prior to the budget period is called a:
14-5
9.
A budgeting process that involves justifying resource requirements based on an analysis
and prioritization of organizational objectives is called:
10.
___________ budgets are generally more expensive to maintain than single-period budgets
because more time and effort is required in their preparation.
14-6
11.
The key data element on which the entire budget is based is the:
12.
The operating budget depends on key information developed in the:
14-7
13.
The production budget uses all of the following
except:
14.
A materials purchases budget must be completed immediately after the preparation of the:
14-8
15.
Operating expenses are best budgeted on the basis of knowledge about:
16.
The cash budget is especially important to a firm when:
14-9
17.
Which of the following costs are included in the cost classification that is based on the
relationship between total cost and volume of activity?
18.
Which of the following costs are included in the cost classification that is based on the
time frame perspective?
14–10
19.
A cost that is incurred because of a long-range policy decision is known as a:
20.
Which of the following is
not
an important factor to consider when preparing a sales
forecast?
14–11
21.
Which of the following is a plan for acquiring the resources needed to complete the
manufacturing activities that will satisfy the organization’s sales forecast?
22.
Which of the following lists the components of the master budget in correct chronological
order?
14–12
23.
The raw materials budgeted to be purchased for the period is equal to:
24.
The operating expense budget is based on the:
14–13
25.
Depreciation on the office equipment would appear in which of the following budgets?
26.
Which of the following items would be included in the operating expense budget?
14–14
27.
Which of the following would
not
appear in the operating expense budget?
28.
What is the “key” to the entire operating budget?
14–15
29.
Which of the following is the last budgeted financial statement to be prepared?
30.
Which of the following lists the components of the master budget in correct chronological
order?
14–16
31.
A cash budget would not include:
32.
A key to estimating an accurate amount of cash to be collected from sales is:
14–17
33.
An important reason for imposing a minimum cash balance in the cash budget is:
34.
The development of the operating budget is complete when:
14–18
35.
A standard cost or production standard that is achievable under actual operating
conditions is called a(n):
36.
Standard costs are comprised of two elements:
14–19
37.
______________ standards allow inefficiencies from prior years to be incorporated into the
budget, thus providing little incentive for improvement.
38.
A standard cost or production standard that assumes maximum operating conditions and
100% efficiency at all times is called a(n):
14–20
39.
Standard costs are used in which of the following phases of the management process?
40.
Fixed costs classified according to the time frame perspective are known as: