In: Accounting
-budgeted income statement – direct materials budget – production budget – sales budget
-sales budget – production budget – direct materials budget – budgeted income statement
Who would typically be responsible for the direct material quantity variance?
-the production manager
-the chief financial officer
-the purchasing manager
-the human resources manager
Which of the following is not a component of the operating budget?
-sales budget
-selling and administrative budget
-Budgeted balance sheet
-raw materials purchases budget
Top-down budgeting is:
-when the local managers impose a budget on the top management
-when customers impose a budget on top management of the company.
-when top management sets the budget and imposes it on lower levels of the organization
-when top management imposes a budget on the board of directors.
The number of units included in the production budget:
-are always the same as the number of units in the sales budget.
-depends on the raw materials purchases budget.
-is based on the number of units in the sales budget, and increased for increases in the selling and administrative expense budget to account for increased demand.
-may differ from the number of units in the sales budget, depending on ending inventory goals.
1) Who would typically be responsible for the direct material quantity variance?
Solution: the production manager
Explanation: The production manager is responsible for the direct material quantity variance
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2) Which of the following is not a component of the operating budget?
Solution: Budgeted balance sheet
Explanation: An operating budget includes the expenses and revenue targets a company sets for each year, quarter and month
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3) Top-down budgeting is:
Solution: when top management sets the budget and imposes it on lower levels of the organization
Explanation: Top-down budgeting refers to a budget method when the senior management develops a high-level budget for the company.
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4) The number of units included in the production budget:
Solution: may differ from the number of units in the sales budget, depending on ending inventory goals
Explanation: The number of units in the sales budget and the production budget may differ due to the change in ending goods inventory levels