Question :
15) The number of units in the sales budget and : 1212125
15) The number of units in the sales budget and the production budget may differ because of a change in ________.
A) finished goods inventory levels
B) overhead charges
C) direct material inventory levels
D) sales returns and allowances
16) Which of the following is a benefit of keeping inventory levels low?
A) It reduces setup costs.
B) It reduces shrinkage costs.
C) It reduces the loss from lost sales.
D) It reduces inventory turnover.
17) Budgeted production equals ________.
A) beginning finished goods inventory + budgeted unit sales – targeted ending finished goods inventory
B) targeted ending finished goods inventory + beginning finished goods inventory – budgeted unit sales
C) budgeted unit sales + targeted ending finished goods inventory – beginning finished goods inventory
D) budgeted unit sales + targeted ending finished goods inventory + beginning finished goods inventory
18) Best products, an Atlanta based company, is in the midst of its budgeting process. It has already prepared its direct materials usage budget and is now in the process of preparing its direct material purchase budget. In addition to the details gathered to prepare the direct materials usage budget, Best also must know ________.
A) the level of direct material inventory to be maintained
B) the ratio of direct materials to cost of goods sold
C) the beginning direct materials inventory level
D) the quantity of direct materials to be purchased
19) Total finished units to be produced is based on the ________.
A) direct material purchase budget
B) budgeted sales units
C) direct material usage budget
D) budgeted manufacturing overhead
20) Which of the following is most likely to be a cost driver for the variable portion of marketing costs?
A) percentage of markup on cost
B) number of units produced
C) increase in revenues attributable to such marketing
D) number of units units sold
21) Which of the following is required to arrive at the budgeted units to be produced in a year?
A) estimated direct materials inventory required at the end of the year
B) estimated finished goods inventory required at the end of the year
C) amount of direct materials to be used during the year
D) amount of manufacturing overhead to be incurred
22) When direct material and direct labor is the limiting factor, revenue budgets are usually based on ________.
A) expected demand of the company’s products
B) the capital in the budget period
C) the supply of indirect material and labor in the market
D) maximum units that can be manufactured
23) Which of the following information is required by a company’s manager while preparing a manufacturing overhead costs budget?
A) estimated incentives to be paid to marketing personnel
B) estimated expense for office supplies
C) estimated expense for maintenance of factory building
D) rent expense for lease of office building
24) Esther Baskets Company expects to manufacture and sell 20,000 baskets in 2016 for $5 each. There are 4,000 baskets in beginning finished goods inventory with target ending inventory of 5,000 baskets. The company keeps no work-in-process inventory. What amount of sales revenue will be reported on the 2016 budgeted income statement?
A) $105,000
B) $100,000
C) $95,000
D) $55,000
