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Cost Accounting 101 Practice Test: Master Budget and Responsibility Accounting
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A master budget is a collection of lower-level budgets that outlines a company's objectives. Responsibility accounting is a budgeting process that involves analyzing and cutting costs.  Here's some more information about master budgets and responsibility accounting: Master budget: A master budget is a strategic plan that combines a company's smaller budgets into one larger budget. It's usually developed by a firm's budget committee and includes a sales budget, production schedule, and direct materials, labor, and overhead budget. A master budget can help management identify goals, motivate... Show more
Cost Accounting 101 Practice Test: Master Budget and Responsibility Accounting
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25 Questions

1. Financial planning models:
2. Operating budgets and financial budgets:
3. Financing decisions primarily deal with:
4. Financing decisions deal with how to best use the limited resources of an organization.
5. A manager of a profit center is responsible for all of the following EXCEPT:
6. A rolling budget is the same as a continuous budget.
7. When administered wisely, budgets promote communication and coordination among the various subunits of the organization.
8. The sales forecast should primarily be based on statistical analysis with secondary input from sales managers and sales representatives.
9. Building in budgetary slack includes:
10. To reduce budgetary slack management may:
11. When the operating budget is used as a control device, managers are less likely to be motivated to budget higher sales than actually anticipated.
12. A good budgeting system forces managers to examine the business as they plan, so they can:
13. Budgeted production equals:
14. Budgets should:
15. A maintenance manager is most likely responsible for a(n):
16. All of the following are encouraged with kaizen budgeting EXCEPT:
17. Budgets can play both planning and control roles for management.
18. Activity-based budgeting (ABB) focuses on the budgeting cost of activities necessary to produce and sell products and services.
19. Lower-level managers will not actively participate in the budget process if they perceive upper management does NOT believe in the process.
20. Individual budgeted amounts included in the manufacturing overhead costs budget are based on input from:
21. Research shows that challenging budgets improve employee performance because employees view falling short of budgeted numbers as a failure.
22. Multinational budgeting is more complex than budgeting in a domestic environment due to the possibility of:
23. A sales forecast is:
24. A key use of sensitivity analysis is for cash-flow budgeting.
25. The manufacturing labor budget depends on wage rates, production methods, and hiring plans.

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