1) How might the budgeting process be used ethically within an organization?

A) A sales manager defers sales to future periods once she has met her quota for the month to avoid having her budgeted quota increased in future periods. (She worries an increased quota would prevent her from spending time with her ailing father.)

B) An accounting manager implements budgeting procedures to measure the environmental impact of the production process, striving to reduce emissions from the factory. (She worries not enough emphasis is placed on the non-financial measures of success.)

C) A production manager begins production on orders that have not been placed in order to meet a budgetary goal for production units started during a period. (She worries that failing to meet a production goal will cause her department to forfeit their bonuses for the year.)

D) An entrepreneur offers a steep discount on services to increase the number of clients served during the quarter. (He worries his investor will withdraw funding if the service numbers aren't met and employees will lose their jobs.)

2) Creating a budget is an important part of which phase of the planning and control process?

A) Controlling

B) Planning

C) Implementing

D) Executing

3) Which of the following sequences is correct?

A) Sales budget - production budget - direct materials budget - budgeted income statement

B) Cash receipts budget - sales budget - production budget - budgeted income statement

C) Inventory budget - production budget - sales budget - selling and administrative budget

D) Budgeted income statement - direct materials budget - production budget - sales budget

4) Which of the following budgets shows how many units will be produced each period?

A) Sales budget

B) Production budget

C) Direct labor budget

D) Direct materials budget