E10.1 (LO 1, 2), K Connie Rice has prepared the following list of statements about budgetary control. 1. Budget reports compare actual results with planned objectives. 2. All budget reports are prepared on a weekly basis. 3. Management uses budget reports to analyze differences between actual and planned results and to determine their causes. 4. As a result of analyzing budget reports, management may either take corrective action or modify future plans. 5. Budgetary control works best when a company has an informal reporting system. 6. The primary recipients of the sales report are the sales manager and the production supervisor. 7. The primary recipient of the scrap report is the production manager. 8. A static budget is a projection of budget data at a single level of activity. 9. Top management's reaction to unfavorable differences is not influenced by the materiality of the difference. 10. A static budget is not appropriate in evaluating a manager's effectiveness in controlling costs unless the actual activity level approximates the static budget activity level or the behavior of the costs is fixed. Instructions Identify each statement as true or false. If false, indicate how to correct the statement.

E10.1 (LO 1, 2), K Connie Rice has prepared the following list of statements about budgetary control. 1. Budget reports compare actual results with planned objectives. 2. All budget reports are prepared on a weekly basis. 3. Management uses budget reports to analyze differences between actual and planned results and to determine their causes. 4. As a result of analyzing budget reports, management may either take corrective action or modify future plans. 5. Budgetary control works best when a company has an informal reporting system. 6. The primary recipients of the sales report are the sales manager and the production supervisor. 7. The primary recipient of the scrap report is the production manager. 8. A static budget is a projection of budget data at a single level of activity. 9. Top management's reaction to unfavorable differences is not influenced by the materiality of the difference. 10. A static budget is not appropriate in evaluating a manager's effectiveness in controlling costs unless the actual activity level approximates the static budget activity level or the behavior of the costs is fixed. Instructions Identify each statement as true or false. If false, indicate how to correct the statement.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Master Budget

A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.

Sales Budget and Selling

A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.

Question

E10.1 (LO 1, 2), K Connie Rice has prepared the following list of statements about budgetary control.
1. Budget reports compare actual results with planned objectives.
2. All budget reports are prepared on a weekly basis.
3. Management uses budget reports to analyze differences between actual and planned results and to determine their causes.
4. As a result of analyzing budget reports, management may either take corrective action or modify future plans.
5. Budgetary control works best when a company has an informal reporting system.
6. The primary recipients of the sales report are the sales manager and the production supervisor.
7. The primary recipient of the scrap report is the production manager.
8. A static budget is a projection of budget data at a single level of activity.
9. Top management's reaction to unfavorable differences is not influenced by the materiality of the difference.
10. A static budget is not appropriate in evaluating a manager's effectiveness in controlling costs unless the actual activity level
approximates the static budget activity level or the behavior of the costs is fixed.
Instructions
Identify each statement as true or false. If false, indicate how to correct the statement.

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Which of the following statements is true? 1. Budgets are used for the distinct purposes of planning and profit. II. Control Involves developing goals and preparing various budgets to achieve those goals. III. A continuous or perpetual budget is a 12-month budget that rolls forward one month (or quarter) as the current month (or quarter) is completed. Multiple Choice None of the statements are true. Only statement Ill is true. ○ Only statement I is true. All of the statements are true. B
B9).