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CPA BAR Planning and Budgeting
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The BAR CPA Exam section tests planning and budgeting through cost accounting, master budgets, and flexible budgeting, focusing on variance analysis and performance evaluation. Key topics include preparing sales, production, and cost budgets, along with capital budgeting (NPV, IRR) and governmental budgeting (30-40% of the exam).  Key Planning & Budgeting Components for BAR Master Budgeting Sequence: Starts with sales forecasts   production budget   direct materials, labor, and overhead budgets   Cost of Goods Sold (COGS)   Budgeted Income Statement. Flexible Budgets: Calculates... Show more
CPA BAR Planning and Budgeting
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25 Questions

1. Which of the following would NOT be included in a statement of cash receipts and disbursements for KingPin Corp. in Year 2?
I. A purchase order issued in December Year 2 for items to be delivered in January Year 3
II. The amount of uncollectible customer accounts for Year 2
2. Which of the following budgets are appropriate for planning because they involve both fixed and variable costs?
I. Flexible budgets
II. Static budgets
3. A manufacturer wants to improve its staging process and compares this process against the check-in process for a major airline. In doing so, the tool the manufacturer is using is:
4. The direct labor efficiency variance:
I. could be unfavorable as a result of an unfavorable material usage variance
II. is calculated by using the standard wage rate rather than the actual wage rate
5. A flexible budget would NOT be appropriate for:
I. service industries
II. a direct labor usage budget
6. Participative budgeting can be characterized by which of the following?
I. Increased motivation
II. More time consuming
III. Decreased acceptance
7. A static budget:
I. is based on costs at one level of output
II. includes budgeted costs for actual and budgeted output
8. The financial perspective of a balanced scorecard is concerned with which of the following?
I. Capture of increased market share
II. Employee satisfaction and retention measures
9. Flexible budgeting is limited because it is highly dependent upon an accurate identification of:
I. fixed cost
II. variable cost per unit
10. Which of the following budgets is/are generally produced BEFORE the sales budget?
I. Production budget
II. Cash budget
11. Planned additions of capital equipment from the capital budget are added to the:
I. pro forma balance sheet
II. cash budget
12. Inputs in calculating a cost of goods manufactured budget include which of the following?
I. Finished goods inventory
II. Work-in-process inventory
13. The “internal business” perspective of the balanced scorecard measures:
I. results of business operations through improved efficiencies
II. nonfinancial performance such as employee satisfaction and retention
14. Levin Inc. is preparing a schedule of cash receipts and disbursements for Year 4. Which of the following items should be included?
I. Borrowing funds from a bank on a note payable taken out in August Year 4 and agreeing to pay the principal and interest in July Year 5
II. Dividends declared in October Year 4 to be paid in January Year 5 to shareholders of record as of December Year 4
15. The selling and administrative expense budget can be correctly described as:
I. a financial rather than an operational budget
II. dependent upon sales
16. Which of the following can occur when the quantity budgeted to be sold differs from the quantity actually sold?
I. Sales price variance
II. Sales volume variance
17. Sales less variable costs less controllable fixed costs is referred to as the:
18. Inputs in calculating a cost of goods manufactured budget include which of the following?
I. Overhead applied
II. Material usage
19. Which of the following would NOT be a purpose for identifying manufacturing variances and assigning their responsibility to a person or department?
I. To promote learning and improve operations
II. To provide useful information about pricing of finished goods
20. What are sales forecasts based upon?
I. Past patterns of sales
II. Changes in the firm’s prices
III. Results of market research studies,I and II,I
21. Which of the following would be contained in a performance report for a cost center?
I. Controllable costs
II. Controllable revenues
22. Which of the following types of budgets would NOT be contained in the master budget?
I. Operating budgets
II. Financial budgets
23. Which of the following is/are correct regarding a cash budget?
I. The cash budget shows the availability of funds for repayment of debt.
II. The cash budget is usually NOT broken down into monthly periods.
24. Which of the following would be found in the operating rather than the financial budget?
I. Pro forma income statement
II. Capital expenditures budget
25. A company budgeted the need for 10,000 materials at a price of $30 per unit. The actual units needed turned out to be 11,400 at a price of $28.50 per unit. What is the company’s materials price variance?

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