WorksheetsBudget
Total questions: 15
Worksheet time: 18mins
The strategic planning process relates to:
shorter term planning (usually less than 1 year).
shorter term planning (usually 1 to 3 months).
longer term planning (often 3 to 5 years).
large entities only.
Which of the following statements about a budget is correct?
It is an entity’s short-term plan expressed quantitatively.
Budget targets are always impossible to meet.
It is an entity’s long-term plan expressed quantitatively.
Budgets must be prepared by all types of entities.
The three wheels of planning shows the interrelationships between:
cash, sales and profit.
cash, profit and return on investment.
profit, cash and assets.
return on investment, cash and assets.
The schedule of receipts from accounts receivable is prepared to provide information for the:
cash budget.
sales budget.
production budget.
budgeted balance sheet.
It takes 2 labour hours to produce 1 board and is paid $280/8hr day. The cost to produce 500 units is
$17 500
$14 000
$28 000
$35 000
Sharpe Ltd made these estimates. The cash bal at 1 July is $13,000. The cash bal at 31 Dec is:
surplus of $13 500.
surplus of $11 000.
surplus of $26 500.
deficit of $15 000.
At the end of Feb, Brayden Pty Ltd reviewed its performance and noted the following:
$7000 U, $1200 U, $1500 F
$7000 F, $1200 F, $1500 U.
$7000 U, $1200 F, $1500 U.
$7000 F, $1200 U, $1500 U.
Total Sales for
April- $42,000
May- $54,000
June- $38,000
Credit sales are normally settled in the pattern:-
- 50% in the month of sales
- 40% in first month following the sales
- The balance in the second month following the sales
Calculate the estimated cash received from total sales for June.
$44 800
$25 800
$19 000
$40 600
Which of these is NOT a strategy to reduce cash outflow?
Minimise inventory on hand.
Sell unnecessary non-current assets.
Defer capital expenditure.
Make use of credit terms offered by suppliers.
The master budget is commonly classified into which two sections?
Sales and cash budgets
Operating and financial budgets
Sales and manufacturing budgets
Statement of profit or loss and statement of financial position budgets
The production budget for Top Furniture Ltd shows that 500 coffee tables are to be produced for the month of December. It takes 2 labour hours to produce each coffee table and labour is paid at $280 per 8-hour day. What is the budget cost of labour for the month of December?
$14 000
$28 000
$17 500
$35 000
Fresh Cuts Pty Ltd is a hair salon that needs to develop an operating budget. From the following options, select the budgets and the order in which they would be prepared for Fresh Cuts.
Sales budget, labour budget, operating expenses budget
Sales budget, production budget, labour budget
Sales budget, materials budget, operating expenses budget
Production budget, sales budget, operating expenses budget
Better Deals Ltd had credit sales of $25 000 for March; $30 000 for April; and $18 000 for May. Credit sales are normally settled in the following pattern:
50% in the month of sale
40% in the month following the sale
10% in the second month following the sale.
Calculate the estimated cash received from credit sales during the month of May.
$9 000
$12 000
$23 500
$21 000
Tango Ltd estimates their sales volume for the year is 30 000 units. The beginning materials inventory is $300 000 and the desired ending materials inventory is $240 000. If the materials cost per unit is $60, calculate the budgeted cost of materials for the year.
$1 860 000
$1 740 000
$1 800 000
$2 040 000
Which of the following statements regarding the participative style of budgeting is NOT true?
Often results in targets that are easier to achieve.
Budgets are set after negotiations between senior management & department manager.
Provides department manager opportunity to create some ‘room to move’.
Department managers do not have ownership of the target and budget.
