Budget

What is a flexible budget?

• a budget for semi-variable overhead costs only

• a budget which,by recognising different cost behaviour patterns, is designed to change as volume of activity changes

• a budget for a twelve month period which includes planned revenues, expenses, assets and liabilities

• a budget which is prepared for a rolling period which is reviewed monthly, and updated accordingly

What is a fixed budget?

• a budget for a single level of activity

• a budget used when the mix of products is fixed in advance of the budget period

• a budget wh ich ignores inflation

• an overhead cost budget

What is the formula to calculate the material usage budget?

• Production budget multiplied by the standard material quantity per unit

• Sales budget multiplied by the standard material quantity per unit

• Production budget less opening inventory plus closing inventory

• Production budget plus opening inventory less closing inventory

A company makes 2 products, X and Y, which are sold in the ratio 1:2. The selling prices are

$50 and $100 respectively. The company wants to earn $100,000 over the next period.

• X- 1,334 Y - 667

• X - 800 Y - 400

• X - 667 Y - 1334

• X - 400 Y - 800

Globe Ltd. has the following original budget and actual performance for product Bean for the year ending 31 December.

Volume sold (litres)

What is the total production cost of the flexed budget?