5 mcq questions

1. A continuous budget typically:
A. drops completed months and adds future months as time passes.B. is known as
pro forma budgeting.C. is a top-down approach with management constantly issuing
budget edicts.D. eliminates the need for periodic bank reconciliations.E. None
of these

2. T manufactures chairs, and each requires 4 feet of lumber. 1,500 and 1,700
chairs will be built in April and May, respectively. T keeps lumber on hand at 40%
of the next month's production needs. How many feet should T buy in April?
A. 5,980B. 6,300C. 6,320D. 8,720E. None of these.

3. A company began operations on January 1 with cash of $75,000. January sales were
$150,000. No collections occurred. Cost of goods sold is $40,000, and there are no
ending inventories or payables. How much cash was on hand at the end of January?
A. $35,000B. $110,000.C. $185,000.D. $225,000.E. None of these.

4. Operations began May 1. Sales are budgeted to increase as $15,000, $17,000, and
$20,000 for the first three months. Ending inventory is 75% of the next month's
projected sales. Ending inventory for June is:
A. $15,000.B. $11,250.C. $7,500 if the gross profit rate is 50%.D. $5,625 if
the gross profit rate is 50%.E. None of these.

5. When used for performance evaluation, periodic internal reports based on a
responsibility accounting system should not:
A. be related to the organization chart.B. include allocated common fixed
costs.C. include variances between actual and budgeted controllable costs.D. 
distinguish between controllable and noncontrollable costs.E. None of these.