Conclusion

1. | A master budget is typically prepared for: A. | A period of one year. | B. | Top management only. | C. | Strategic planning purposes only. | D. | Strategic business units only. | E. | Operating activities only. | | | | 2. | A plan of dollar amounts to be spent on long-term projects is called a: A. | Cash budget. | B. | Capital budget. | C. | Rolling budget. | D. | Sales budget. | E. | Rolling financial forecast. | | | | 3. | Budgeting provides all of the following except: A. | A means to communicate the organization 's short-term goals to its employees. | B. | Support for management functions of planning and coordinating activities of the organization. | C. | A means to anticipate problems. | D. | An ethical framework for decision-making. | E. | A basis for motivating employee behavior. | | 4. | Traditional financial control systems have recently been criticized because: A. | They use flexible, not static, budgets. | B. | They generally lead to goal-congruent behavior on the part of managers. | C. | They focus more in improving basic business processes than short-term financial results. | D. | They fail to incorporate nonfinancial performance indicators into the evaluation process. | E. | They provide performance data on a real-time basis. | | 5. | Another name for the total operating income variance for a period is: A. | Flexible-budget variance. | B. | Master (static) budget variance. | C. | Sales volume variance. | D. | Total income variance. | E. | Sales mix variance. | | 6. | Cripe Corporation maintains ending inventory for each month at 5% of the following month 's sales. It predicted the following sales (in units) for the first four months of the coming year:

How many units should be produced in March? A. | 2,810. | B. | 2,850. | C. | 2,970. | D. | 2,990. | E. | 4,250. | | 7. | LeMinton Company expects the