Question 1

A(n) ___ budget allows the allocation of resources to vary in proportion with various levels of activity.

Accepted Answer

The answer of A(n) ___ budget allows the allocation of...

Question 2

In a chain of discount department stores, personnel needs are estimated in three different ways: (a) for a high demand season, (b) for a moderate demand season, and (c) for a slack season. By taking these three activity levels into account, managers are developing a ___.

Accepted Answer

Since the personnel needs are estimated for three different activity levels, a flexible budget would be the most appropriate choice. A flexible budget adjusts to changes in activity levels and is suited for businesses that experience fluctuations in demand. A fixed budget would not be appropriate in this situation since it does not account for changes in activity levels, and a zero-based budget typically starts from scratch and does not consider historical activity levels. A standing-use plan is a set of instructions for recurring events and does not account for changes in demand. A policy is a set of guidelines or rules, but it is not directly related to budgeting.

Question 3

Which of the following statements best distinguishes between procedures and policies?

Accepted Answer

Procedures provide detailed and specific instructions for carrying out a certain task or action, while policies are broad guidelines that set the overall direction and goals for an organization. Procedures are typically used in specific situations, while policies are intended to guide decision-making across multiple situations.

Question 4

When a university issues a statement that it "… will not tolerate sexual harassment in relation to the evaluation of employee or student performance …," a ___ plan in the form of an organizational ___ is being communicated.

Accepted Answer

The statement is indicating a standing policy that is meant to be in place indefinitely rather than a single-use plan. It is also addressing a broader issue of sexual harassment, rather than a specific action or activity, making it a policy rather than a procedure or rule.

Question 5

When a project or activity is budgeted in each new budget period as if it were brand new, a(n) ___ budgeting approach is being used.

Accepted Answer

The answer of When a project or activity is budgeted...

Question 6

Financial budgets

Accepted Answer

Financial budgets are primarily concerned with projecting cash flows and expenditures to ensure that an organization can meet its financial obligations and plan for future financial needs.

Question 7

___ communicate broad guidelines for making decisions and taking action in specific circumstances.

Accepted Answer

Policies communicate broad guidelines for making decisions and taking action in specific circumstances, whereas rules and regulations are more specific and detailed. Procedures are step-by-step instructions for performing a task, and guidelines are typically more flexible than policies, offering suggestions or recommendations rather than mandates.

Question 8

___ are single-use plans that commit resources for specific time periods to activities, projects, or programs.

Accepted Answer

The description fits budget plans, which allocate resources and commit to specific time periods. Procedures, policies, guidelines, and forecasts are not necessarily associated with committing resources for specific time periods.

Question 9

A policy of zero-tolerance toward sexual harassment at workplace is an example of ___ plans used by organizations.

Accepted Answer

The policy of zero-tolerance toward sexual harassment at the workplace is an example of a standing plan. Standing plans are established for ongoing activities and provide guidance for decision-making and action on a recurring basis. In this case, the policy is in place to address any instances of sexual harassment that may occur in the workplace and provides guidance for responding to and addressing such instances.

Question 10

___ budgets allocate resources like labour, equipment, and space.

Accepted Answer

Nonmonetary budgets allocate resources such as labor, equipment, and space, focusing on non-financial resources.

Question 11

A fixed budget

Accepted Answer

A fixed budget allocates a specific amount of resources for a specific purpose, and it does not change even if the actual activity level differs from the budgeted level.

Question 12

What is the primary difference between a policy and a procedure?

Accepted Answer

The primary difference between a policy and a procedure is that a policy sets a broad guideline for decision making, while a procedure defines the precise actions to be taken in a given situation. Policies provide a framework for consistent decision making, while procedures provide the step-by-step instructions for carrying out specific tasks or processes.

Question 13

A ___ budget is defined as one that allocates a fixed amount of resources for a specific purpose.

Accepted Answer

A fixed budget allocates a predetermined amount of resources for a specific purpose, and is inflexible in response to changes in circumstances or demand.

Question 14

___ or ___ describe exactly what actions are to be taken in specific situations.

Accepted Answer

Rules and procedures are specific and detailed instructions on what actions should be taken in certain situations. Goals, policies, projects, objectives, and strategies can provide general direction or objectives, but they do not outline specific steps to follow.

Question 15

Which of the following types of budgets plot anticipated sales or revenues against expenses?

Accepted Answer

Operating budgets plot anticipated sales or revenues against expenses, focusing on the day-to-day operations of a business.

Question 16

Procedures are stated in employee handbooks and often called ___.

Accepted Answer

Standard operating procedures (SOPs) are the most common type of procedures found in employee handbooks. They outline the step-by-step processes for completing tasks or handling situations in a consistent and efficient manner. Bureaucratic procedures, contingency procedures, experimental procedures, and catalogued procedures may also be included in handbooks but are less common.

Question 17

A ___ communicates broad guidelines for making decisions and taking action in specific circumstances.

Accepted Answer

A policy communicates broad guidelines or principles to guide decision-making and action, whereas a procedure outlines step-by-step instructions for performing a specific task. A vision is a statement of long-term aspirations, a tactical plan outlines specific actions to achieve short-term goals, and a budget is a financial plan.

Question 18

___ are often found in employee manuals as standard operating procedures.

Accepted Answer

Rules are commonly found in employee manuals as standard operating procedures. Goals and budgets may also be included, but they are not as commonly included as rules.

Question 19

Sahoko, the manager of a construction company, oversees allocating equipment and construction workers to different construction projects. She allocates most of the equipment and workers to high priority projects. In this scenario, Sahoko creates a ___ budget.

Accepted Answer

A nonmonetary budget involves the allocation of resources other than money, such as equipment and labor, which is what Sahoko is managing.

Question 20

Which of the following is a single-use plan?

Accepted Answer

A budget is a single-use plan because it is created for a specific period of time, such as a fiscal year, and is not meant to be used repeatedly. Once the budget period is over, a new budget is created for the next period. Procedures, policies, missions, and visions are all ongoing plans that guide an organization's actions over an extended period of time.

Quiz 8: Planning Processes and Techniques