Budgeting and Cost

What are the 3 Groups for the elements of cost?

• Material, labour & expenses

• Operating, Financing & investing

• Funding, controlling & servicing

• Product, expenses & cost of sale

Direct costs ____ directly traced to the cost object

What are the two outcomes for a variance analysis?

• Favorable variance

• Unfavorable variance

• Negative variance

• Positive variance

Negative variance occurs when the actuals come in ____ then the measure it is compared to.

which of these is not a way to decrease cash outflow

• Decrease expenses

• Decrease Drawings

• Implement credit terms

• Boost Revenue

Which of these can result in an increase to cash inflows

• Increase revenue

• Sale of idle non-current assets

• Increase capital injections

• Faster collection of accounts receivable

Market-based pricing is

• What customers are willing to pay

• The cost of product, plus the mark up

Period costs are those related to

• A businesses costs during their reporting period

• A businesses costs during the financial year

• the cost incurred in a period, that relates to producing the products

• the costs incurred in a period that do not relate to manufacturing

If a cash budget forecasts a surplus the business should

• inform shareholders of a dividend payment

• consider investment oppurunties

• Increase wages

• increase drawings for owners

Prices charged for products or services must be set ____ enough to cover costs, but not too ____ to deter customers.

• High & Low

• High & High

• Low & Low

• Low & High