WorksheetsUnit 5 Ch17 - Budgets
Total questions: 20
Worksheet time: 5hrs 0mins
What is the formula for Profit?
Profit = Revenue - Costs
Profit = Revenue + Costs
Profit = Revenue/Costs
Profit = Costs/Revenue
None of the answers
Fill in the blank. Budgets are _______ plans that forecast revenue from sales and expected costs over a time period
Financial
Operational
Marketing
Human resource
None of the answers
Select the three main types of budgets:
Revenue budget
Expenditure budget
Profit budget
Interest budget
Tax budget
Fill in the blank. A revenue budget includes the likely selling _______ of the product and the expected level of sales.
Price
Cost
Expenditure
Production
None of the answers
Select the two other names for an expenditure budget:
Cost budget
Production budget
Profit budget
Earnings budget
Revenue budget
Select the other name for a revenue budget:
Cost budget
Production budget
Profit budget
Earnings budget
Expenditure budget
What are the correct last 3 steps in constructing a budget?
Revenue budget -> Cost budget -> Profit budget
Cost budget -> Revenue budget -> Profit budget
Profit budget -> Cost budget -> Revenue budget
Profit budget -> Revenue budget -> Cost budget
None of the answers
Select all of the difficulties in constructing a budget:
It may be difficult to forecast sales accurately
The risk of unexpected changes
Decisions by governments and other public bodies
None of the answers
What is the process of investigating any differences between forecasted data and the actual figure?
Variance analysis
Cash flow forecast
Budget
Break-even analysis
None of the answers
If actual revenue < budgeted revenue, what type of variance is it?
Adversarial variance
Favourable variance
None of the answers
If actual costs < budgeted costs, what type of variance is it?
Adversarial variance
Favourable variance
None of the answers
Budgeted costs are £10,000, and actual costs are £11,000. What is the variance?
£21,000
£1,000
£110,000,000
£1.1
None of the answers
Budgeted costs are £10,000, and actual costs are £11,000. What type of variance is it?
Favourable variance
Adversarial variance
None of the answers
Budgeted revenue is £10,000, and actual revenue is £11,000. What type of variance is it?
Favourable variance
Adversarial variance
None of the answers
Select all of the possible actions you could take on adversarial variance on revenue:
Update or extend product range
Increase advertising and/or promotions
Seek new markets
Cut wages
Seek cheaper raw materials
Select all of the possible actions you could take on adversarial variance on costs:
Update or extend product range
Increase labour productivity
Seek new markets
Cut wages
Seek cheaper raw materials
Select all of the advantages of budgeting:
Used to motivate staff
Controls finances effectively
Enables managers to make informed and focused decisions
Cost of training can be substantial
Allocating budgets fairly and in the best interests of the business is difficult
Select all of the disadvantages of budgeting:
Used to motivate staff
Controls finances effectively
Often relate to current financial year and do not take into account longer term interests of business
Cost of training can be substantial
Allocating budgets fairly and in the best interests of the business is difficult
True or False. Budgeting is effective if managers review budgets frequently to assess effectiveness and make adjustments accordingly.
True
False
None of the answers
True or False. Budgeting is effective if it is constructed to assist the business achieving financial and wider objectives.
True
False
None of the answers
