Question

Please answer all questions:

1) Which of the following items is a key point considered in a special-order decision? a. The preparation of segmented income statements of the special order b. Depreciation expense on the existing warehouse building c. The estimated benefits associated with the special order d. Cost of a new information technology system a company is considering purchasing regardless of whether the special-order decision is accepted or rejected

2) The ending finished goods inventory budget supplies information needed for the: a. sales budget. b. cash budget. c. budgeted income statement. d. cost of goods sold budget. e. All of these choices are correct.

3) Which of the following is the most common starting point in the information gathering process for budgeting? a. The projected income statement b. The sales forecast c. The production forecast d. The personnel forecast

4) Which of the following is a use of budgets for the purpose of control? a. Communication is improved. b. Budgets set a standard against which actual results can be compared. c. Plans can be made for the future. d. If conditions change between the formation of the budget and the current time, static budgets can be quickly adapted. e. All of these choices are correct.

5) A production budget is prepared to ascertain the: a. selling expenses. b. cash receipts. c. factory overhead costs. d. finished goods inventories.

Answer 1

Solution 1:

key point considered in a special-order decision is "The estimated benefits associated with the special order"

Hence option c is correct.

Solution 2:

The ending finished goods inventory budget supplies information needed for the "cost of goods sold budget"

Hence option d is correct.

Solution 3:

The sales forecast is the most common starting point in the information gathering process for budgeting. Hence option c is correct.

Solution 4:

Use of budgets for the purpose of control is "Budgets set a standard against which actual results can be compared"

Hence option b is correct.

Solution 5:

A production budget is prepared to ascertain the "finished goods inventories"