1. Budgets can have a positive or negative effect on human behaviordepending on the manner in which the budget is developed and administered.2. The direct materials budget must be completed before the productionbudget because the quantity of materials available for production must beknown.3. The starting point in developing the master budget is the preparation of theproduction budget.4. In a production budget, if the number of units in finished goods inventory atthe end of the period is less than the number of units in finished goodsinventory at the beginning of the period, then the expected number of unitssold is less than the number of units to be produced during the period.5. The direct labor budget begins with the required production in units fromthe production budget.Which of the above statements are FALSE?

A budget is a financial structure or plan which are prepared based on historical and current…

1. Budgets can have a positive or negative effect on human behavior depending on the manner in which the budget is developed and administered. 2. The direct materials budget must be completed before the production budget because the quantity of materials available for production must be known. 3. The starting point in developing the master budget is the preparation of the production budget.

1. Budgets can have a positive or negative effect on human behavior depending on the manner in which the budget is developed and administered. 2. The direct materials budget must be completed before the production budget because the quantity of materials available for production must be known. 3. The starting point in developing the master budget is the preparation of the production budget.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Management by Exception

A manager’s job is a very tough one. A manager needs to look at the various areas of work and as a manager he has to look after two or more important jobs or activities at the same time for the growth of the business. In order to do all these things in an effective manner, a manager must adopt or practice different management styles and tactics.

Question

1. Budgets can have a positive or negative effect on human behavior
depending on the manner in which the budget is developed and administered.
2. The direct materials budget must be completed before the production
budget because the quantity of materials available for production must be
known.
3. The starting point in developing the master budget is the preparation of the
production budget.
4. In a production budget, if the number of units in finished goods inventory at
the end of the period is less than the number of units in finished goods
inventory at the beginning of the period, then the expected number of units
sold is less than the number of units to be produced during the period.
5. The direct labor budget begins with the required production in units from
the production budget.
Which of the above statements are FALSE?

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