1. Which of the following is an advantage of budgeting?

1. Which of the following is an advantage of budgeting?A. Manager satisfactionB. Bigger profitsC. Lower costsD. Enhanced coordination2. A budget that is not adjusted for the actual level of activity is a:A. sales budgetB. flexible budgetC. static budgetD. zero base budget3. A management approach that investigates only those variances that are significant.A. Management by exceptionB. Management by differencesC. Management by variancesD. Management by investigation4. Which of the following depends directly on the production budget?A. Selling and administrative expenses budgetB. Capital acquisitions budgetC. Labor budgetD. Sales budget5. Indicates when a loan can be repaid.A. Capital acquisitions budgetB. Budgeted balance sheetC. Selling and administrative expenses budgetD. Cash receipts and disbursements budget6. Which of the following budgets has both a variable and a fixed component?A. Cash budgetB. Direct labor budgetC. Manufacturing overhead budgetD. Sales budget7. Differences between budgeted costs and actual costs are called:A. differences.B. exceptions.C. variances.D. estimates.8. The primary reason for using a flexible budget is to:A. allow management to manipulate costs in order to meet goals.B. compare actual costs with what budgeted costs would be at the actual activity level.C. eliminate the fluctuations in the production process.D. measure the difference between actual activity and budgeted activity.9. Required units to be produced is equal to:A. expected sales + desired ending inventory – beginning inventoryB. expected sales – desired ending inventory + beginning inventoryC. expected sales + desired beginning inventory – ending inventoryD. expected sales – desired ending inventory + beginning inventory10. Required purchases of direct materials is equal to:A. amount required for production – desired ending inventory + beginning inventoryB. amount required for production + desired ending inventory + beginning inventoryC. amount required for production – desired ending inventory – beginning inventoryD. amount required for production + desired ending inventory – beginning inventory11. Which of the following is not included in the EPS ratio?A. Preferred stock dividendB. Net incomeC. Common stock dividendD. Number of common shares outstanding12. Which of the following consists of cash flows from raising capital, making payments to investors, and repaying amounts borrowed?A. Operating activitiesB. Financing activitiesC. Investing activitiesD. Selling activities13. Is an estimate of the incremental profit generated by each dollar of sales:A. price-earnings ratio.B. return on sales.C. return on total assets.D. gross margin percentage.14. Is a measure of investors’ expectations about a company’s future profitability.A. EPSB. Price-earnings ratioC. Gross margin percentageD. Return on total assets15. Consists of calculating the dollar change in financial statement amounts across time.A. Vertical analysisB. Circular analysisC. Horizontal analysisD. Diagonal analysisMATCHING A – Match the following terms to the statements shown below. Use each term only once. Use capital letters for your answers. Enter your answer in the space beside the question number.A. Sales budget F. Selling & administrative expenses budgetB. Production budget G. Capital acquisitions budgetC. Material purchases budget H. Budgeted cash receipts and disbursementsD. Labor budget I. Budgeted income statementE. Manufacturing overhead budget J. Budgeted balance sheet______ 1. Shows what property, plant, and equipment will be purchased.______ 2. Includes both variable and fixed production costs.______ 3. Shows when there will be excess cash available.______ 4. Based on the amount of time it takes to produce a finished unit.______ 5. The second component of the master budget.MATCHING B – Match the following terms to the statements shown below. Use each term only once. Use capital letters for your answers. Enter your answer in the space beside the question number.A. Accounts receivable turnover F. Financial leverageB. Asset turnover G. Horizontal analysisC. Current ratio H. Investing activitiesD. Days’ sales in accounts receivable I. Price-earnings ratioE. Debt-to-equity ratio J. Return on total assets______ 6. Makes the return on common stockholders’ equity higher than the return on total assets______ 7. Includes an adjustment for interest expense, net of taxes.______ 8. Measures the efficiency with which total assets were used.______ 9. Analyzes changes in individual financial statement amounts over time.______ 10. Is a general measure of a firm’s liquidity.MATCHING C – Match the following terms to the statements shown below. Use each item only once. Use capital letters for your answers. Enter your answer in the space beside the question number.A. Days’ sales in inventory F. MD&AB. Earnings per share G. Quick ratioC. Financing activities H. Return on common stockholders’ equityD. Gross margin percentage I. Times interest earnedE. Inventory turnover J. Vertical analysis______11. Analyzes financial statement amounts in comparison to a base amount.______ 12. An annual report section devoted to management’s explanation of results.______ 13. Measures profitability in relation to stockholders’ investment.______ 14. Is an estimate of the incremental profit generated by each dollar of sales.______ 15. Is a stringent test of a company’s liquidity.