2. Is the following statement true or false?

"A budget covers periods longer than one year and is used for strategic planning"

3. Is the following statement true or false?

"A budget manual will contain instructions governing the preparation of budgets"

4. Cash budget is a functional budget. Is it true or false

5. Is the following statement true or false?

"A principal budget factor is a factor which limits an organization's performance" (activities)

6. Distribution and selling resources NOT be a principal budget factor. Is it true or false?

7. Is the following statement true or false?

"When preparing the master budget, establishing the organization's long-term objectives would normally be carried out first

3. Is the following statement true or false

The master budget includes the (Budget manual is instructions for the completion of the budget forms and responsibilities of the personal involved)" budget income statement, budget balance sheet and cash budget

9. Is the following statement true or false?

The master budget details the timetable for the preparation of the various budgets

10. Is the following statement true or false?

"Positive correlation means that low values of one variable are associated with high values of the other, and high values of one variable are associated with low values of the other"

11. Is the following statement true or false?

An advantage of the high-low method of cost estimation is that it takes into account the full (relevant) range of available data"

12. The coefficient of determination must always fall between 0 and +1. Is it true or false?

13. Reducing the incidence of budgetary slack is an advantage of a "bottom-up' style of budgeting. Is it true or false

14. Is the following statement true or false?

"A characteristic of rolling budgets is that a new accounting period, such as a month or a quarter, is added as each old one expires"

15. "A firm that uses zero-based budgeting for its overheads has a zero variance between budgeted and actual overhead"

22. Is the following statement true or fabe?

In the re-order level system of inventory control, a fixed quantity will be order wamever inventory falls to a pre determined level.

16. Is the following statement true or false?

The key trade-off that lies at the heart of working capital management is that between business stability and solvency

17 Is the following statement true or false?

Insurance cost is an inventory holding cost"

18. Is the following statement true or false?

Profit and cash flows are the same

19. Is the following statement true or false?

"When using the EOQ formula to find the optimal quality to be ordered, the purchase price per unit is mclude in the calculation"

20. Is the following statement true or false?

Just in time (IT) manufacturing systems require a large amount of inventory to be held for production and sales

21. Is the following statement true or false?

Perpetual inventory method is a system where by inventory levels are reviewed at fixed time intervals to fit in with production schedules, and vatsable quantities are ordered as appropriate

23. Is the following statement true or false

In the ABC system of inventory control, urcentury is categorized into classes A, B or C according to mual cost of the usage of that inventory stem, or the difficulty of replacements, or the importance to the prodaction proce

24. Is the following statement true or false?

"In the periodic review system of inventory control, the inventory records are updated for each receipt and issue of inventory as it occurs."

25. Is the following statement true or false regarding the Economic order quantity system?

"One of EOQ's limitations is that it ignores the potential benefit of taking advantage of bulk discounts because it does not consider whether the best price is being obtained.

26. Is the following statement about the manager's reaction in the control system true or false? "By comparing actual results and plans, depending on how managers see the situation, they can revise the plans"

27. Is the following statement about a flexible budget true or false?

"Flexible budget shows the costs and revenues at different levels of activity"

28. Is the following statement about exception report for information Feedback true or false?

"An exception report is a document that states all differences between actual performance and expectations, usually in a negative direction."

29 Is the following statement about one of the advantages of decentralization true or false?

"Decentralization makes performance evaluation of managers and their area of responsibility easier”

30. Is the following statement about responsibility accounting true or false?

"Within a system of responsability accounting there are four mam types of responsibility center cost center, revenue center, profit center and investment center

31. Is the following statement about cost centers true or false?

"Managers of cost centers can take control action on controllable costs and investment in non- current assets of those centers

32. Is the following statement about investment centers true or false?

"Investment centers have the highest degree of autonomy"

33. Is the following statement about one of advantages of shared service center true or false?

"Shared service center can reduce overhead costs

46. Is the following statement true or false?

"A standard cost per unit is the expected, or normal, cost per unit, based expectations (standards) for usage and price per unit of resources"

47. Is the following statement true or false?

"A standard cost per unit is an amount of usage and price per unit of resources that will certainly incur in the future"

48. Is the following statement true or false?

"Standard costing (for control) involves: (i) The estimation of the costs of products or services;

(ii) The collection of actual costs; (iii) The comparison of the actual costs with the predetermined

estimates"

"Standard costing (for control) involves: (i) The collection of the costs of products or services;

(ii) The estimation of actual costs; (iii) The comparison of the actual costs with the

predetermined estimates?"

50.Is the following statement true or false?

"Budgetary control variance analysis is based on a comparison between actual results and a flexed budget that uses standard costs"

51.Is the following statement true or false?

“budgetary control variance analysis is based on comparison between actual results and a fixed budget that uses standard costs”

52. Is the following statement true or false?

“standard costs, when established, are average expected unit costs”

53. Is the following statement true or false?

“Standard costs are rigid specification”

54.  Is the following statement true or false?

“Should only be reported and investigated if there is a significant difference between actual and stadard?”

55. Is the following statement true or false?

“Variances should be reported and investigated whenever there is a difference between actual and standard”

56. Is the following statement true or false?

“standards should be continually monitored to ensure that they are reasonable and reliable”

57.Is the following statement true or false?

"Standard costs provide a yardstick against which actual costs can be measured"

58.1s the following statement true or false?

"Actual costs provide a yardstick against which standard costs can be measured"

59.Is the following statement true or false?

"Standard costing can be easily applied in service environments"

60.Is the following statement true or false?

"When actual results are better than expected results, we have a favorable variance (F)"

61.  is the following statement true or false?

"If actual results are worse than expected results, we have an adverse variance (A)"

62. Is the following statement true or false?

"Material total variance measures the difference between the standard material cost of the expected (mited) output units and the actual maternal cost incurred"

63.Is the following statement true or false?

"Material total variance measures the difference between the standard material cost of the actual output units and the actual material cost incurred"

64. Is the following statement true or false"

"The material total variance can be divided into the material price variance and the material efficiency variance"

65. Is the following statement true or false?

"The material price variance is the difference between the standard cost and the actual cost for the actual quantity of material used or purchased"

66. Is the following statement true or false?

"The material usage variance is the difference between the standard quantity of materials that should have been used for the number of units actually produced, and the actual quantity of materials used, valued at the actual price per unit of material

67.Is the following statement true or false?

"The material usage variance is the difference between the standard quantity of materials that should have been used for the mumber of units actually produced, and the actual quantity of materials used, valued at the standard price per unit of material"

68. Is the following statement true or false?

"Labour total variance measures the difference between the standard labour cost of the actual output units and the actual labour cost incurred"

69 Is the following statement true or false?

"The labour rate variance is the difference between the standard cost and the actual cost for the expected hours paid at actual output units

. Is the following statement true or false?

"The labour efficiency variance is the difference between the hours that should have been worked for the number of units actually produced, and the actual number of hours worked, valued at the standard rate per hour

71. Is the following statement true or false?

"The vanable overhead total variance, can be subdivided into the variable overhead expenditure variance and the variable overhead usage variance

72. Is the following statement true or false?

"The fixed overhead expenditure variance is the difference between the budgeted and actual fixed overhead expenditure in the period

73.1s the following statement true or false?

"The sales price variance is a measure of the effect on expected contribution of charging a different selling price from the standard selling price"

74. Is the following statement true or false?

"The sales volume variance is the difference between the actual units sold and the budgeted quantity, valued at the expected sales price per unit"

75.Is the following statement true or false?

"Unforeseen discounts recerved" is one of the reasons for a favourable material price variance"

76. Is the following statement true or false?

“Material price increase” is one of the reasons for a favourable material price variance”

77.Is the following statement true or false?

"More effective use of material' is one of the reasons for an adverse material variance"

78.Is the following statement true or false?

"Theft is one of the reasons for an adverse material usage variance"

 79,Is the following statement true or false?

"Use of workers at a lower rate of pay than standard' is a reason of a favourable labour rate variance"

80.Is the following statement true or false?

"Use of workers at a lower rate of pay than standard' is a reason of an adverse labour rate variance"

81.Is the following statement true or false?

"Better quality of equipment or materials' may be a reason for a favourable labour efficiency variance"

82. is the following statement about contribution trar or false?

"Contribution per unit is the difference between the selling price per unit and the vanable costs per unit”

83, is the following formula to calculate profit true or false?

Profit (sales volume x contribution per unit) fixed cost per unit

84. is the following formola to calculate breakeven point true or false?

Breakeven point in units Total fixed costs/contribution per unit

85. is the following statement about breakeven point true or false?

"Breakeven point is the activity level at which there is neither s profit nor a loss."

86. is the following statement about traditional breakeven chart true or false?

"The breakeven point where the sales revenue line crosses the fixed cast line".

87. is the following statement about traditional breakeven chart true or false?

"The breakeven point is at the intersection of the sales line and the total cost line"

88. is the following statement about margin of safety true or false?

"The margin of safety is the difference in units between the budgeted sales volume and the actual sales volume

89. "If margn of safe for product Z is 2000 unit then actual sales can fall short of budget by 2000 units before the breakeven point is reached and no profit is made"

90. is the following statement about CVP analysis true or false?

"CVP analysas is the study of the interrelationships between contribution, volume and profit at various levels of activity

91 is the following statement about the variable cost line on a contribution breakeven chart true or false?

The variable cost line on a contribution breakeven chart starts at origin."

92. is the following statement about Imiting factor true or false?

A limiting factor a anything which limits the managers to make decisions in operating a business"

93 is the following statement about limiting factor analysis in order to calculate “when using limiting factor analysis in order to calculate maximum profit. It is assumed that total fixed costs are not changed by mcrease or decreases in production volume."

94. Is the following statergent about limiting factor analysis true or false?

"When there's muufficient resource to meet the potential sales demand for 2 products, in order to muxanize contribution, company should give production priority for product which has the higher contribution per unit of litmiting facter than the other

If a specific resource is a limiting factor, contribution will be maximized by earning the lowest possible contribution per unit of lumuting factor"

96. Is this true or false if material is identified as a limiting factor in cases as follows?

It needs 3 Kg of material X and 2 machine hours to produce one unit of product A and those of 2 Kg and 1.5 hours for product B. It was expected that 6000 machine hours and 10000 kg of X being available for production. Sale demand was 2000 units for each production