41. The sales forecast directly affects many elements of the master budget. Which of the following would be least affected by short-term fluctuations in the sales forecasts?
A. The production schedule.
B. The budgeted income statement.
C. The capital expenditures budget.
D. The operating expense budget.
42. The production schedule in units:
A. Cannot be prepared until the budgeted income statement is completed.
B. Is dependent upon the sales forecast for the period.
C. Is based upon the manufacturing cost budget, that is, upon the level of funds available for manufacturing costs.
D. Is the starting point in the preparation of the master budget.
43. Preparation of a budgeted income statement does not require:
A. Estimates of cost of goods sold.
B. Estimates of the timing of cash receipts and payments.
C. Preparation of a sales forecast.
D. Anticipation of operating expenses.
44. Which of the following is considered a financial budget estimate?
A. The manufacturing cost budget.
B. The cost of goods sold budget.
C. The operating expense budget.
D. The prepayments budget.
45. Which element of a master budget would normally be prepared last?
A. A cash budget.
B. A budgeted balance sheet.
C. A budgeted income statement.
D. A production budget.
46. A cash budget is affected directly by each of the following except:
A. A capital expenditures budget.
B. A sales forecast.
C. A manufacturing cost budget.
D. A budgeted income statement.
47. In a cash budget, the budgeted level of cash receipts depends on all of the following except:
A. The sales forecast.
B. The credit terms offered to customers.
C. The credit terms offered by suppliers.
D. Experience in collecting receivables.
48. A budget that can be adjusted easily to show budgeted revenues, costs, and cash flows at different levels of activity is known as:
A. A flexible budget.
B. A master budget.
C. A production budget.
D. A multi-level budget.
49. If the volume of output of a factory for the month of June is 50,000 units, while the budgeted output was 40,000 units:
A. Comparison of budgeted results and actual results will be misleading unless the company uses a flexible budget.
B. Actual fixed costs per unit may be expected to exceed budgeted levels.
C. Actual cost per unit will be higher than standard cost per unit.
D. Both total production costs and unit production costs should be approximately 25% above budgeted levels.
50. A flexible budget is one that:
A. Is revised monthly in the light of changing business conditions.
B. Is a compromise plan reflecting diverse views of various supervisors.
C. Contains estimated cost data for several different levels of activity.
D. Separates factory overhead between the variable and fixed portions.