BEC 5

Question 1

Test Strategy

Answer 1

If you read all the answers and a few of them sound good, consider that you missed an except in the question

Question 2

Characteristic of a Defivative

Answer 2

No net investment
Underlying Amount
Notational Amount
Net Settlement Amount

Question 3

Operating Budget What does it do

Answer 3

Emphasis is on obtaining and using current resources

Question 4

What are the components of the operating budget?

Answer 4

Sales Budget
Production Budget
Direct Materials Budget
Direct Labor Budget
Manufacturing Overhead Budget
COGS Budget
Non-Manufacturing Budget
     Research and Development
     Selling and Administrative
Pro-Forma Income Statement
No Balance sheet or Cash flows

Question 5

Financial Budget What is it’s emphasis

Answer 5

Obtaining funds needed to purchase operating assets

Question 6

Component of the Financial Budget

Answer 6

Capital Budget
Cash Budget
   Projected Disbursement Schedule
   Projected CAsh Collection schedule
Proforma Balance Sheet
Pro Forma Stmnt of Cash Flows

Question 7

Master Budget Process page 432 Gleim

Answer 7

Short-term goals
Sales Budget
Production Budget
COGS Budget (DL

Question 8

What methods of capital budgeting don’t consider depreciation if tax effects are ignored

Answer 8

IRR, NPV, Payback

Question 9

Which method consider cash flows

Answer 9

IRR NPV Payback

Question 10

CAPITAL TURNOVER

Answer 10

SALES / INVESTED CAPITAL

Question 11

RESIDUAL INCOME SYNONYM

Answer 11

COST OF CAPITAL

Question 12

Product life cycle stages

Answer 12

Introduction
Growth
Maturity (Profits are Highest)
Decline

Question 13

STages of product life cycle with highest number of firms

Answer 13

Maturity

Question 14

Strategic Planning is (and is opposed to operational planning)

Answer 14

Strategic planning establishes the general direction of an organization. It embodies the concerns of senior management and is based specifically on (1) identifying and specifying organizational objectives; (2) evaluating the organization’s strengths and weaknesses; (3) assessing risk levels; (4) identifying and forecasting the effect of external (environmental) factors relevant to the organization; (5) deriving the best strategy for reaching the objectives, given the organization’s strengths and weaknesses and the relevant future trends; and (6) analyzing and reviewing the capital budgeting process and capacity planning.

Question 15

Operational Planning (versus strategic)

Answer 15

Answer (A) is incorrect.

Decisions to use parts of the organization’s resources in specified ways defines operational planning.

Question 16

Days Sales Outstanding

Answer 16

Receivables/Sales Per Day

Take the Sales and Divide by 365 to get the sales per day