Indicate whether each of the following is true (T) or false (F) in the space provided.

The budget itself and the administration of the budget are entirely accounting responsibilities.

A primary benefit of budgeting is that it provides definite objectives for evaluating subsequent performance at each level of responsibility.

If a budget is effective enough, it can be a substitute for management.

Management acceptance of budgets occurs more frequently when the flow of input data is from the highest level of responsibility to the lowest level of responsibility.

Effective budgeting depends on an organizational structure in which authority and responsibility over all phases of operations are clearly defined.

The budget committee is usually made up of people outside the company in order to decrease bias.

Financial planning models and statistical and mathematical techniques may be used in forecasting sales.

Long-range planning usually emphasizes meeting annual profit objectives.

Long-range plans contain considerably less detail than short-term budgets.

The sales budget is derived from the production budget.

The production budget shows unit production data as well as cost data.

The direct materials budget is derived from the direct materials units required for production plus desired ending direct materials units less beginning direct materials units.

The direct labor budget contains only quantity data (hours) which are derived from the production budget.

The manufacturing overhead budget shows the expected manufacturing overhead costs.

The cash budget contains three sections (cash receipts, cash disbursements, and financing) and the beginning and ending cash balances.

In order to develop a budgeted balance sheet, the previous year”s balance sheet is needed.

One difference between the master budget of a merchandising company and a manufacturing company is that the purchases budget is used instead of a production budget.

In service enterprises, the critical factor in budgeting is coordinating materials and equipment with anticipated services.

Not-for-profit organizations usually budget on the basis of cash flows (expenditures and receipts) rather than on a revenue and expense basis.

For governmental units, the budget must be strictly followed and overspending is often illegal.