International Accounting
5th Edition
ISBN: 9781259747984
Author: Doupnik, Timothy S., Finn, Mark T., Gotti, Giorgio
Publisher: Mcgraw-hill Education,
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Chapter 10, Problem 11Q
To determine
Identify the condition that are appropriate to hold the manager of a foreign subsidiary responsible for the exchange rate variance in case of comparison of the operating budget and actual results.
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Which of the following statements is not true?
Budgeted sales volumes and terms of trade will enable monthly budgeted cash inflows from sales to be calculated.
The budgeted direct costs of sales depend upon the volume of budgeted sales and production.
Budgeted fixed costs in the budgeted statement of profit or loss are allocated to each month on the accruals basis, while payments for budgeted fixed costs in the cash budget are allocated to the months in which they are paid.
Budgeted net cash flow for the month = the total budgeted monthly cash receipts + the total budgeted monthly cash payments
How does a schedule of collections from sales assist in preparing the cash budget?
How are standards used in budgetary performance evaluation?
The materials cost variance report for Nickols Inc. indicates a large favorable materials price variance and a significant unfavorable materials quantity variance. What might have caused these offsetting variances?
Which of the following statements is not correct?
The revenue budget is the starting point in preparing the master budget.
The revenue budget is constructed by multiplying the expected sales in units by the sales price.
The production budget is not based on the revenue budget.
The cash budget is used to determine whether the firm will have enough cash on hand.
Chapter 10 Solutions
International Accounting
Ch. 10 - Prob. 1QCh. 10 - What makes calculation of NPV for a foreign...Ch. 10 - How does the evaluation of a potential foreign...Ch. 10 - Prob. 4QCh. 10 - How does an ethnocentric organizational structure...Ch. 10 - Prob. 6QCh. 10 - When might it be appropriate to evaluate the...Ch. 10 - Prob. 8QCh. 10 - Prob. 9QCh. 10 - How can a local currency operating budget and...
Ch. 10 - Prob. 11QCh. 10 - What is the advantage of using a projected future...Ch. 10 - Prob. 3EPCh. 10 - Prob. 4EPCh. 10 - Imogdi Corporation (a U.S-based company) has a...Ch. 10 - Philadelphia, Inc. (a Greek company) has a foreign...Ch. 10 - Fitzwater Limited (an Irish company) has a foreign...Ch. 10 - Prob. 9EPCh. 10 - Viking Corporation (a U.S.-based company) has a...Ch. 10 - Duncan Street Company (DSC), a British company, is...
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- Which of the following statements is not correct? A. The sales budget is computed by multiplying estimated sales by the sales price. B. The production budget begins with the sales estimated for each period. C. The direct materials budget begins with the sales estimated for each period. D. The sales budget is typically the first budget prepared.arrow_forwardWhich approach is most likely to result in employee buy-in to the budget? A. top-down approach B. bottom-up approach C. total participation approach D. basing the budget on the prior yeararrow_forwardWhich of the following is true with respect to the sales budget? Group of answer choices It provides sales data to prepare the budgeted income statement. It captures the variable and fixed expenses of the business. It has no relation with the production budget. It provides sales data to prepare income statements for stockholders and creditors.arrow_forward
- Which of the following statements correctly describes rela-tionships within the master budget? (More than one answer may be correct.)a. The production budgets are based in large part on thesales forecast.b. In many elements of the master budget, the amountsbudgeted for the upcoming quarter are reviewed andsubdivided into monthly budget figures. c. The operating budgets affect the budgeted income state-ment, the cash budget, and the budgeted balance sheet. d. The capital expenditures budget affects the direct mate-rials budget.arrow_forwardWhich of the following is a correct definition of budget? Select one: a. A financial and/or quantitative statement, prepared and approved prior to define period of time, of the policy to be pursued during that period for the purpose of attaining a given objective b. A financial statement which reports the achieved and not achieved objectives of the company for a period of time. c. A statement which includes the strategic objectives of a company to be achieved in the long term. d. A financial and/or quantitative statement, prepared and approved after a define period of time, of the policy pursued during that period for the purpose of evaluating the objectives achieved. Clear my choicearrow_forwardWhich of the following appears on the budgeted balance sheet? * A. estimated sales B. estimated cost of goods sold C. estimated fixed selling expense D. estimated ending accounts receivablearrow_forward
- Which of the following is NOT a problem associated with traditional line-item budgets? Absence of program value measurement Single-year cost orientation The fallacy of appellation Inability to control input usagearrow_forwardHow do managers use budgets to control business activities?a) Match the concept (by number) to the correct terminology. 1. Static Budget2. Budget Performance Report3. Variance4. Static Budget Variance5. Flexible Budget6. Flexible Budget Variance7. Sales Volume Variance______ A budget prepared for various levels of sales volume.______ The difference between actual results and the expected results in the flexible budget for the actual units sold. ______ The difference between the expected results in the flexible budget for the actual units soldand the static budget. _____ The difference between actual results and the expected results in the static budget. _____ A report that summarizes the actual results, budgeted amounts, and the differences. _____ A budget prepared for only one level of sales volume. _____ The difference between an actual amount and the budgeted amount; labeled as favorable if it increases operating income and unfavorable if it decreases operating income. In…arrow_forwardWhen a company develops and implements a master budget, there is a tendency to incentivize adherence to the goal with bonuses or by tying the employee compensation plans to the achievement of the budget goals. What are some opportunities and risks of these financial incentive programs?arrow_forward
- What limits the usefulness to managers of fixed budget performance reports?arrow_forwardWhat is the difference in purpose between an economic-enterprise budget and the results of the feasibility step 6 economic comparison analysis?arrow_forwardThe purpose of a flexible budget is:a) To cap discretionary expenditureb) To produce a revised forecast by changing the original budget when actual costs are knownc) To control resource efficientlyd) To communicate target activity levels within the organization by setting a budget in advance of the period to which it relatesarrow_forward
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