BUDGET AND VARIANCE ANALYSIS - Flexible Budgeting Quiz

BUDGET AND VARIANCE ANALYSIS - Flexible Budgeting Quiz

University

10 Qs

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BUDGET AND VARIANCE ANALYSIS - Flexible Budgeting Quiz

BUDGET AND VARIANCE ANALYSIS - Flexible Budgeting Quiz

Assessment

Quiz

Business

University

Hard

Created by

Vimala C

FREE Resource

10 questions

Show all answers

1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is a flexible budget?

A budget that is inflexible and cannot be adjusted

A budget that only accounts for fixed costs

A budget that never changes

A budget that adjusts for changes in activity levels

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Explain the concept of flexible budgeting and its importance in variance analysis.

Flexible budgeting is not necessary for variance analysis, as it does not affect the results.

Flexible budgeting allows for adjustments in budgeted figures based on changes in activity levels, which provides a more accurate basis for variance analysis.

Flexible budgeting is only important for small businesses, not for large corporations.

Flexible budgeting is a fixed budget that does not change regardless of activity levels.

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What are the key components of a flexible budget?

Operating costs, capital costs, and indirect costs

Fixed costs, variable costs, and historical costs

Direct costs, indirect costs, and sunk costs

Variable costs, fixed costs, and the level of activity

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

How is a flexible budget different from a static budget?

A static budget is always accurate

A flexible budget is not suitable for long-term planning

A flexible budget does not consider changes in activity levels

A flexible budget adjusts for changes in activity levels.

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Discuss the advantages of using a flexible budget in variance analysis.

A flexible budget does not allow for adjustments based on different levels of activity

Using a flexible budget leads to inaccurate variance analysis

A flexible budget provides better comparison of actual results with expected results at different levels of activity.

A flexible budget makes it difficult to compare actual results with expected results

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What are the limitations of flexible budgeting?

Inability to adapt to changing business conditions

Unlimited flexibility and ability to accommodate any changes

Assumption of variable costs and need for inaccurate cost behavior predictions

Assumption of fixed costs and need for accurate cost behavior predictions

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Explain the process of preparing a flexible budget.

Guess the budget without considering activity levels

Only consider variable costs in the budget

Create a budget without adjusting for changes in activity levels

Identify activity levels, determine variable and fixed costs, and create a budget that adjusts for changes in activity levels.

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