Busn 278 midterm exam A+++

 1.

Question :

(TCO 1) It is important that budgets be accepted by:

Student Answer:

Division managers

Department heads

Supervisors

All of these

Instructor Explanation:

Chapter 1, Page 9

Points Received:

5 of 5

Comments:

 2.

Question :

(TCO 2) The qualitative forecasting method that individually questions a panel of experts is ________________

Student Answer:

executive opinions.

sales force polling.

the Delphi method.

consumer surveys.

Instructor Explanation:

Chapter 14, Page 230

Points Received:

5 of 5

Comments:

 3.

Question :

(TCO 3) The regression statistic that measures how many standard errors the coefficient is from zero is the ________________

Student Answer:

correlation coefficient.

coefficient of determination.

standard error of the estimate.

t-statistic.

Instructor Explanation:

Chapter 16, Page 247

Points Received:

5 of 5

Comments:

 4.

Question :

(TCO 4) Which of the following statements regarding research and development is incorrect?

Student Answer:

R&D should be greater in high-technology divisions.

R&D should focus on the current products.

R&D should be consistent with the department’s goals.

A critical aspect of R&D is assessing risk.

Instructor Explanation:

Chapter 11, Page 185

Points Received:

5 of 5

Comments:

 5.

Question :

(TCO 5) Priority budgeting that ranks activities is known as:

Student Answer:

Top-down budgeting

Bottom-up budgeting

Zero-base budgeting

Participative budgeting

Instructor Explanation:

Chapter 21, Page 321

Points Received:

5 of 5

Comments:

 6.

Question :

(TCO 6) Which of the following is a disadvantage of the payback technique?

Student Answer:

It is difficult to calculate.

It relies on the time value of money.

It can only be calculated when there are equal annual net cash flows.

It ignores the expected profitability of a project.

Instructor Explanation:

Chapter 20, Page 296

Points Received:

5 of 5

Comments:

 7.

Question :

(TCO 1) There are several approaches that may be used to develop the budget. Managers typically prefer an approach known as participative budgeting.  Discuss this form of budgeting and identify its advantages and disadvantages.

Student Answer:

Participative budgeting is a budgeting strategy that promotes contribution and change from lower-level employees in an organization. Thus, it involves owners and managers but as well the operational employees within the organization and employees can feel a greater connection with the company, improving morale within the organization at the same time. When creating a participative budget, the organization will get involved employees from all areas of operation within the company to provide input. Employees will be able to assist managers and owners measure company budgetary needs for the future budgetary period. One of the advantages of this participation is that it permits the organization to pinpoint possible money-saving and efficiency-increasing strategies. While employees have more input in participative budgeting, the company's owners and managers end to have the ultimate decision concerning budget approval.

Instructor Explanation:

Participative budgeting is a bottom-up approach to budgeting where departmental managers provide input for their budget. The benefit of this approach is that managers typically have more experience and knowledge regarding the daily operations of their department, which allows them to create a more realistic budget. In addition, managers who participate in the budget process are more motivated to achieve budget goals, and there is usually greater support for the budget.
 
A disadvantage of participative budgeting is that it can often be time-consuming and costly. In addition, if budgets are used as a means of performance evaluation, it may encourage budgetary slack, where managers underestimate sales and overestimate costs to create budget values that are easier to obtain. 
 

Points Received:

20 of 20

Comments: