Question

Which of the following statements is NOT correct concerning the Manufacturing Overhead Budget?

Multiple Choice

• The Manufacturing Overhead Budget provides a schedule of all costs of production other than direct materials and labor costs.

• The Manufacturing Overhead Budget shows only the variable portion of manufacturing overhead.

• The Manufacturing Overhead Budget shows the expected cash disbursements for manufacturing overhead.

• The Manufacturing Overhead Budget is prepared after the Sales Budget.

The basic idea underlying responsibility accounting is that a manager should be held responsible for those items—and only those items—that the manager can actually control to a significant extent.

True or False

The budgeted income statement is typically prepared before the budgeted balance sheet.

true or flase

The production budget is typically prepared before the direct materials budget.

True or False

One of the weaknesses of budgets is that they are of little value in uncovering potential bottlenecks.

True or False

Answer 1

Solution 1:

The false statement concerning the Manufacturing Overhead Budget is "The Manufacturing Overhead Budget shows only the variable portion of manufacturing overhead." because manufacturing overhead budget shows both variable and fixed manufacturing overhead.

Hence 2nd option is correct.

Solution 2:

True, The basic idea underlying responsibility accounting is that a manager should be held responsible for those items—and only those items—that the manager can actually control to a significant extent.

Solution 3:

True, The budgeted income statement is typically prepared before the budgeted balance sheet.

Solution 4:

True, The production budget is typically prepared before the direct materials budget.

Solution 5:

False, One of the weaknesses of budgets is that they are of little value in uncovering potential bottlenecks.