Matric no: ________Name: ______________________________ Group:____

Tutorial 7: Chapter 10- BUDGETING Due Date: December 2013

1.

All these are true for budgets to be effective EXCEPT: A. B. C. D. goals should be attainable customers affected by a budget should be consulted when it is prepared evaluations should be made carefully with opportunities to explain any failures they should be properly applied to avoid negative effects

2.

The first step in the capital budgeting process is: A. B. C. D. evaluating the investments financing the selected investments selecting the appropriate investments identifying long-term investment opportunities

3.

In preparing a flexible budget, __________change in direct proportion to changes in volume while __________remain constant, regardless of the volume. A. B. C. D. total variable costs; total fixed costs direct materials costs; direct labour costs rent; total direct labour total fixed costs; total variable costs

4.

The following are benefit derived from budgeting EXCEPT: A. B. C. D. budgeting focuses management's attention on the existing position budgeting provides coordination of departments budgeting provides a basis for evaluating performance budgeting provides motivation for managers and employees
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5.

Which of the following statements about budgeting is FALSE? A. B. C. D. Budgeting is an aid to planning and control Budgets create standards for performance evaluation Budgets help coordinate the activities of the entire organization The master budget should only be prepared by top management

6.

Guidance for preparing a master budget is usually the responsibility of: A. B. C. D. the company CEO the marketing department a budget committee the chief financial officer

7.

Adding a new budget each period so that the budgets always cover the same number of future period, is called: A. B. C. D. participatory budgeting capital budgeting balanced budgeting continuous budgeting

8.

Financial budgets include all the following EXCEPT the: A. B. C. D. sales budget budgeted balance sheet budgeted income statement cash budget

9.

A sporting goods store purchased RM7,000 of soccer boots in October. The store had RM3,000 of soccer boots in inventory at the beginning of October, and expects to have RM2,000 of soccer boots in inventory at the end of October to cover part of targeted sales in November. What is the budgeted cost of goods sold for October? A. B. C. D. RM5,000 RM7,000 RM8,000 RM9,000
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10.

The sales budget for UniCo shows that 22,000 units of Product A are going to be sold for the price of RM12. The beginning inventory of the product is 2,500 units while its desired ending inventory is 3,000 units. Budgeted purchases of Product A for the year would be: A. B. C. D. 24,500 units 22,500 units 16,500 units 26,500 units

11.

SLD Enterprise is trying to decide how many units of merchandise to order each month. The company's policy is to have 20% of the next month's sales in inventory at the end of each month. Projected sales for August, September, and October are 30,000 units, 20,000 units, and 40,000 units, respectively. How many units must be purchased in September? A. B. C. D. 14,000 20,000 22,000 24,000

12.

If budgeted beginning inventory is RM8,300, budgeted ending inventory is RM9,400 and budgeted cost of goods sold is RM10,260, budgeted purchases should be: A. B. C. D. RM1,100 RM1,960 RM9,160 RM11,360

13.

Muslimah's Fashions forecasts sales of RM125,000 for the quarter ended 31 December. Its gross profit rate is 20% of sales and its 30 September inventory is RM32,500. If the 31 December inventory is targeted at RM41,500, the budgeted purchases for the fourth quarter should be: A. B. C. D. RM134,000 RM109,000 RM91,500 RM25,000

14.

TTG Enterprise expects its September sales to be 20% higher than its August sales of RM150,000. Purchases were RM100,000 in August and are expected to be RM120,000 in September. All sales are on credit and are collected as follows: 30% in the month of the sale and 70% in the following month. Merchandise purchases are paid as follows: 25% in the month of purchase and 75% in the following month. The beginning cash balance on 1 September is RM7,500. The ending cash balance on 30 September would be: A. B. C. D. RM31,500 RM67,500 RM54,000 RM61,500

15.

The benefits of budgeting include all of the following EXCEPT: A. B. C. D. facilitate the coordination of activities management can plan ahead provide early warning signal for potential problem assist stakeholders in their decision making

16.

Planning not only motivates employee to achieve goals, but also: A. B. C. D. leads to a better decision making coordinates business activities improves the productivity encourages cooperation among departments

17.

Budgeting involves the following EXCEPT: A. goalsetting B. execution of plans C. incentives for high achievers D. compare achievements and goals The following are correct about static budget EXCEPT: A. B. C. D. related to only one activity level not changed even the activity changes easy to interpret easy to prepare

18.

19.

______________ are included in the budgeted income statement. A. B. C. D. Sales budget and selling & administrative budget Sales budget and cash budget Cash budget and capital expenditure budget Cash budget and inventory budget

20.

For January 2013, the total budgeted sale is 9,900 units. If the beginning inventory is 1,100 units and the desired inventory is 2,000 units, the total goods to be purchased is: A. B. C. D. 9,000 units 13,000 units 11,000 units 10,800 units

Questions 21 and 22are based on the following information: A monthly sale of Cookies Enterprise for year 2013 is budgeted as follows: Units 3,000 4,000 5,000 RM 150,000 200,000 250,000

January February March

The companys policy includes a 30 day credit period for selected customers and only 40% of total sales are allowed for credit. 21. What would be the total budgeted cash receipts for the month of February 2013? A. B. C. D. 22. RM170,000 RM180,000 RM120,000 RM200,000

What would be the amount receivable at the beginning of March 2013? A. B. C. D. RM120,000 RM100,000 RM80,000 RM150,000
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23.

One of the items to be considered in preparation of purchase budget is: A. B. C. D. total credit sales total cash receivables total accounts payable opening and closing inventories

Questions 24, 25 and 26are based on the following information: The following items are details for the first three months in 2013: Sales (units) 12,000 15,000 19,000 Beginning Inventory (units) 3,000 5,000 7,000 Purchases (units) 14,000 X 20,000

January February March 24. X represents: A. B. C. D. 25. 17,000 units 13,000 units 20,000 units 19,000 units

What would be the desired ending inventory for March 2013? A. B. C. D. 6,000 units 7,000 units 8,000 units 9,000 units

26.

The company is granted 30 days credit for 90% of its total purchases. What would be the amount of cash to be paid to creditors in January 2013 if a total purchase in December 2012 is 15,000 units? (Assuming purchase price is RM1.00 per unit). A. B. C. D. RM13,500 RM14,900 RM12,600 RM17,600

27.

The expected production overhead expense for year 2013 includes indirect labor RM150,000; indirect material RM210,000; depreciation on machineries RM100,000; and heat & lights RM90,000. What is total cash payment to be made related to the production overhead in year 2013? A. B. C. D. RM550,000 RM460,000 RM450,000 RM360,000

28.

The followings are items presented in the Budgeted Statement of Financial Position EXCEPT: A. B. C. D. accounts receivable opening inventory of raw materials accumulated depreciation of machineries bank overdraft

Questions 29 and 30 are based on the following data: Syarikat Pelangi estimates to sell their product at RM20 perunit. Its estimated sales quantities for Septemberto November 2011 are as follows: September 1,500 units October 2,000 units November 2,500 units December 3,800 units

Advertising expense is expected to be 5% from the following month sales while other expenses are administrative expense RM25,000 and depreciation expense RM15,000 for each month. 29. The total expected sales for the 3 months are: A. B. C. D. 30. RM42,500 RM42,000 RM41,500 RM43,800

The total selling and administrative expenses for October are: A. B. C. D. RM120,000 RM196,000 RM6,000 RM9,800 END OF QUESTIONS
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Matric no: ________Name: ______________________________ Group:____

Tutorial 7: Chapter 10- BUDGETING Due Date: 9 December 2013

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30.