Topic 9 Budgetary Control Quiz

Why do organisation's use the budgetary control cycle?

• To help control the organization

• To increase employee salaries

• To reduce production time

• To eliminate all expenses

What is the purpose of monitoring budgeted figures against actual figures?

• To provide information for management interventions

• To increase production costs

• To reduce employee salaries

• To eliminate all overheads

What is the planned unit cost of a product or service known as?

• Variable cost

• Standard cost

• Fixed cost

• Overhead cost

In standard costing, how is output valued?

• At a variable cost per unit

• At a fixed cost per unit

• At a standard cost per unit

• At a total cost per unit

Which of the following is a key feature of a rolling budget?

• It is used only for non-profit organizations

• It only includes fixed costs

• It is continuously updated by adding new periods as the current ones end

• It is prepared once and never updated

Which of the following best describes a flexed budget?

• A budget that remains fixed regardless of output

• A budget used only for capital expenditures

• A budget prepared after the accounting period ends

• A budget that adjusts for different levels of activity

What does a flexed budget allow managers to do?

• Eliminate the need for variance analysis

• Set employee salaries

• Ignore changes in production volume

• Compare actual results with budgeted figures at different activity levels

What is the benefit of using variance analysis?

• It increases the total budget automatically

• It helps identify areas where performance is different from the plan

• It reduces the number of employees required

• It eliminates the need for future budgeting

Which type of budget is most useful when actual activity levels differ from those originally planned?

• Zero-based budget

• Flexed budget

• Rolling budget

• Fixed budget