QUESTION 57True Love Inc., is pretty heavy into the use of budgets. Which of the following statements is TRUE of the budgeting process of True-Love and in fact, any company that usesbudgets?O Managers and employees are motivated to accept the budget's goals because they enjoy having their work monitored and evaluated.O Ha company carefully plans for its future, there will be no need to make modifications during the budget periodO R shows the actual performance of the businessO It is a continuous process that encourages communication.QUESTION S8Opportunity cost is the benefitO given up by purchasing goods at a price lower than its total manufacturing costO gven up by choosing an alternate course of actionO received by selling goods on behalf of another divisionO received by seling goods to one of the other divisions within the companyQUESTION 59Last year. T-Bal Company spent $36.000 on employee training to improve customer service. The cost and time spent on traning is considered anO opportunity costO relevant costOavoidable costsO sunk cost

A company plans its future financial activities in the form of a budget.

QUESTION 57 True Love Inc., is pretty heavy into the use of budgets. Which of the followingr statements is TRUE of the budgeting process of frue-Love and. in fact, any company that uses budgets? O Managers and employees are motivated to accept the budget's goals because they enjoy having their work monitored and evaluated. OHa company carefully plans for its future. there will be no need to make modifications during the budget period It shows the actual performance of the business It is a continuous process that encourages communication. QUESTION SA Opportunity cost is the benefit Ogven up by purchasing goods at a price lower than its total manufachuring cost O given up by choosing an alternate course of action O received by selling goods on behalf of another division O received by selling goods to one of the other divisions within the company QUESTION 59 Last year. T-Bal Company spent 530.000 on employee training to improve customer service. The cost and time spent on traning is considered an O opportunty cost relevant cost avoidable costs

QUESTION 57 True Love Inc., is pretty heavy into the use of budgets. Which of the followingr statements is TRUE of the budgeting process of frue-Love and. in fact, any company that uses budgets? O Managers and employees are motivated to accept the budget's goals because they enjoy having their work monitored and evaluated. OHa company carefully plans for its future. there will be no need to make modifications during the budget period It shows the actual performance of the business It is a continuous process that encourages communication. QUESTION SA Opportunity cost is the benefit Ogven up by purchasing goods at a price lower than its total manufachuring cost O given up by choosing an alternate course of action O received by selling goods on behalf of another division O received by selling goods to one of the other divisions within the company QUESTION 59 Last year. T-Bal Company spent 530.000 on employee training to improve customer service. The cost and time spent on traning is considered an O opportunty cost relevant cost avoidable costs

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

Cash budget

A cash budget is an estimate of an organization's cash flow for the future period. A cash budget forecasts future cash receipts and payments from various sources for a fiscal year. A cash budget can be created once a month or once a week to determine the organization's cash position and ensure its performance in relation to the budget. It aids in determining whether the company has enough cash and cash equivalents to meet its operational needs in the future. If cash receipts are insufficient to cover future expenses, an organization may plan to obtain funds from other sources. After estimating the sales, purchase, and capital expenditure budgets for the year, management develops a cash budget. These budgets are created to ensure that an organization's cash flow is managed. It is important to note that only cash transactions are recorded when actual cash enters and exits an organization.

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Current Attempt in Progress The production manager at ABC Inc. is responsible for formulating the budget for his department. He will be evaluated on his ability to control costs. After considerable thought, he arrives at his best estimate of costs, and then adds a further 10% to the projections. Chances are he has Inflated the cost projections because that is the way it has always been done. O conservative accounting practise requires that he not under report expenses. O by overestimating expenses, it will make it easier for him to come in under budget and receive a favourable evaluation. Onone of the above.
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Does the manager of a Samsung distribution center participate in long-term budgeting? Explain.
Asumme the company has always used a ‘traditional’ incremental approach towards building its budgets to plan for the future. The company is now concerned that this may not be appropriate in the current turbulent political and economic environment which he believes may last for a number of years. As a result, he has also asked you for advice about how he might adopt a more flexible planning approach without losing financial control. Critically review the current budget preparation process. Critically analyse the potential advantages and disadvantages of adopting a ‘beyond budgeting’ approach instead. Provide Cameron with a recommendation(s) for the future based on your findings.
Question 5 Evaluate 2 types of budgeting used in a medium sized private company with identification of merits and disadvantages of each method. a) b) What is an annual budget? Do all companies need to provide annual budgets? Please justify your answer.
Why does preparing the master budget require a committee? Can't a medium-large company get by with directives from the CEO/CFO? What are some of the pitfalls under this scenario? When are sales and cost variances favorable?
In the previous week, we have discussed planning budgets that are based on standards. How are standards developed and are they only useful for companies that manufacture products or do service type industries utilize standards? Please explain and give examples!
Master budgets can provide a great deal of information to managers and investors including: O Sales forecasts that allow costing, production information, staffing. and cash flow information. O How much investors will get in dividends for the year. O A clear guideline for production so they know when to quit making product.
When looking at the main difference between the budget preparation process of a manufacturing company and that of a service company, a. service company budgets focus more on the sales budget than do manufacturing companies. O b. the budget process contains the same level of complexity in both types of companies. c. manufacturing budgets focus more on the long-range planning components of the process than do service companies. O d. the budget process is more important to a manufacturing company because of the higher level of capital investment involved.
How do managers use budgets to control business activities?a) Match the concept (by number) to the correct terminology. 1. Static Budget2. Budget Performance Report3. Variance4. Static Budget Variance5. Flexible Budget6. Flexible Budget Variance7. Sales Volume Variance______ A budget prepared for various levels of sales volume.______ The difference between actual results and the expected results in the flexible budget for the actual units sold. ______ The difference between the expected results in the flexible budget for the actual units soldand the static budget. _____ The difference between actual results and the expected results in the static budget. _____ A report that summarizes the actual results, budgeted amounts, and the differences. _____ A budget prepared for only one level of sales volume. _____ The difference between an actual amount and the budgeted amount; labeled as favorable if it increases operating income and unfavorable if it decreases operating income. In…
Budgets need to be fair and attainable for employees to consider the budget important in their normal daily activities. Which of the following situations will likely lead to human behavior problems? a. allowing employees the opportunity to be a part of the budget process b. setting goals too loosely, creating a budgetary slack c. setting goals that are consistent across the firm d. setting goals that are reasonable and attainable