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WorksheetsBudgeting-A level Business
Total questions: 9
Worksheet time: 5mins
A potential downside of budgeting is that budget holder:
Might take short term decisions
will feel less motivated
Might spend their budget rather than make savings
will always spend more than their allowance
Which of these statements about budgeting is correct:
Budget can help motivate the staff.
A budget is a financial plan.
A forecast looks forward whereas budget looks back.
Budget provides coordination and direction.
The sales budget assumes 200 units would be sold for $15 each; actual sales were $4,200.What was the variance?
$3000 (adverse)
$1200 (favourable)
$1200 (adverse)
$3000 (favourable)
A common reason why many small businesses don't use budgets is that:
Trading is too predictable.
The law only requires them for large firms.
SME's don't record variances.
Budgeting can be time consuming.
Which of these actions might help correct an adverse overheads variance?
Increase bonus payments.
Reduce Head Office staff numbers.
offer promotional discounts
Cut supplier payments for raw materials.
Which of the following is a possible explanation for a favourable sales variance?
Higher than expected selling prices
Lower than expected gross profit margins
Lower than expected overtime costs.
Lower than expected sales volumes.
Which one of these is most likely to result in an adverse overheads variance?
Customer respond to price cut.
Management get a surprise pay increase.
Capital spending fall short of budget.
Actual gross profit margin is 5% less than budget.
Which one of these would result in a favourable budget variance?
Budget cost $18; Actual cost $16
Budget revenue $125k;Actual revenue $115k
Actual gross profit $13k ;Budget gross profit$16k
Actual sales $40k; Budget sales $42k
Which one of the following is an adverse variance?
Marketing expenditure lower than the budget.
Raw material cost lower than the budget.
Gross profit margin higher than the budget.
Sales revenue lower than the budget..
