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WorksheetsIB BM 3.9 Budgets
Total questions: 15
Worksheet time: 11mins
So, what is a budget?
Your monthly allowance
A tool to help business financing at the starting phases of a business
A tool to help financial planning and is used to set out plans for spending over a period of time
A business management term used for product development ;)
but what is a Variance analysis tho?
This is not a part of this topic
Analysis that calculates how effectively business is using its cash flow in variance to its budget
An analysis that compares forecast with theory
Analysis that compares a business budgeted expenditure with the actual expenditure over time over a period of time
What tf does No variance mean?
Things turned out as planned
Nothing happened
Things turned out worse than expected
This is not even a term??
Variances can occur in three different areas of a budget:
Expenditure variances, Cost variances, Profit variances
Profit variances, Revenue variances, Cost variances
Cash variances, Liability cost variances, Asset worth variances
Why are your shoelaces untied?
AA store plans to purchase some stock for $120 and sell it for 240$. However, it actually pays just 110$ for the stock and sells it for $255. What is the profit variance?
$120
$20
$25
$45
If variable costs have increased as a result of increased sales, are managers happy to pay the cost?
Na
Ya
So, what is a profit center?
a part of the business that contributes to its overall profit
a part of the business that contributes to its overall revenue
a part of the business that manages how the profit is utilized
a part of the business that measures profit
but what is a cost center tho?
a part of the business that incurs costs but does not contribute to its overall revenue
a part of the business that incurs costs but does contribute to its overall costs
a part of the business that incurs costs and also contributes to its overall expenses
A liability that eats most of the pastries before very bake sale
A car factory makes two different cars. Both cars are produced using the same equipment in the same building. Each car is classified as its own cost center. What would be an example of a direct cost in this scenario?
The Machinery
The wages of Production Staff
The engines that are delivered from a supplier
Rent at the factory
What is included in a budget for a cost centre?
Revenue variances
Profit variances
All of these ;)
Cost variances
What is included in the budget for a profit center?
Revenue variances
Cost variances
but maybe even all of these ;)
Profit Variances
If ACTUAL forecast profit is $11,400 but Budgeted forecast profit is $10,500. What is the Variance?
900
Adverse
-900
Favorable
A business gains many advantages from setting a budget to manage its expenditure. These do NOT include:
Planning
Coordination
Communication
Performance Management
Business Management
Which of the following is not considered an advantage of using budgets?
Staff Motivation
Product Development
Improved communication
Performance measurement
Budgets are?
Financial plans for the future
Pls stop
No they are not
Predictions that come true
