WorksheetsBudgetary Control & Costing
Total questions: 30
Worksheet time: 30mins
A budget is a financial plan or statement which shows specific objectives or targets that a business hopes to achieve over a given period of time
True
False
Firms make budgets for ALL of the following reasons EXCEPT:
To set targets and business objectives
Allows the firms to identify and assess alternative courses of action
To monitor performance of the business over time
To provide reports to their customers
ALL of the following are advantages of budgeting EXCEPT:
Acts as a guide for managers in the achievement of business objectives
Fosters communication and coordination within the organization
They may be inappropriate for current conditions
Provides control for income and expenditure
Which of the following is a drawback of budgeting:
Acts as a guide for managers in the achievement of business objectives
Allows for the proper employment of capital
Fosters communication and coordination within the organization
A stringent budget may lead to inflexibility in the adaptation of change
Budgets are categorized under three main headings.
True
False
Budgets are categorized as ALL of the following EXCEPT:
Fixed Budget
Inflexible Budget
Zero-based Budget
Flexible Budget
Which of the following statements best describes a fixed budget?
One that is adjusted when there are changes in the business environment.
One that is adjusted as fixed and variable costs change.
One that is drafted based on the needs of each activity.
One that remains the same even if the activity level of the firm is different from the projected figures.
Which of the following statements best describes a zero-based budget?
One that is adjusted when there are changes in the business environment.
One that is adjusted as fixed and variable costs change.
One that is drafted based on the needs of each activity.
One that remains the same even if the activity level of the firm is different from the projected figures.
Which of the following statements best describes a flexible budget?
One that is adjusted when there are changes in the business environment.
One that is weighed against its benefits to the business.
One that is drafted based on the needs of each activity.
One that remains the same even if the activity level of the firm is different from the projected figures.
A Sales budget is usually the first budget to be prepared by the business.
True
False
Which of the following statements best describes a Sales Budget?
It is a forecast of the number of units that should be produced.
It is a plan showing the forecasted sales for the period.
It is a forecast that shows the quantity of materials that are needed.
It is a forecast that shows the number of labour hours needed to produce the products.
Which of the following statements best describes a Production Budget?
It is a forecast of the number of units that should be produced.
It is a plan showing the forecasted sales for the period.
It is a forecast that shows the quantity of materials that are needed.
It is a forecast that shows the number of labour hours needed to produce the products.
Which of the following statements best describes a Material Budget?
It is a forecast of the number of units that should be produced.
It is a plan showing the forecasted sales for the period.
It is a forecast that shows the quantity of materials that are needed.
It is a forecast that shows the number of labour hours needed to produce the products.
Which of the following statements best describes a Labour Budget?
It is a forecast of the number of units that should be produced.
It is a plan showing the forecasted sales for the period.
It is a forecast that shows the quantity of materials that are needed.
It is a forecast that shows the number of labour hours needed to produce the products.
Which of the following statements best describes a Cash Budget?
It is a forecast of the number of units that should be produced.
It is a plan showing the forecasted sales for the period.
It is a forecast that shows the quantity of materials that are needed.
It is a forecast that shows the estimated cash inflows and outflows including revenue and capital items.
A variance refers to the difference between actual and budgeted figures of the firm. This is also known as Variance Analysis
True
False
Variances can be either unfavorable (adverse) or favorable (positive).
True
False
A favourable (positive) variance is where the actual figures are below than the budgeted figures.
True
False
This is a measure of the amount by which the acutal labour costs differ from the budgeted labour costs.
Sales Variance
Materials Variance
Labour Variance
Cash Variance
This is a measure of the amount by which the actual sales are above or below the budgeted sales.
Sales Variance
Materials Variance
Labour Variance
Cash Variance
All of the following are types of costs EXCEPT:
Variable
Direct
Variance
Indirect
Costs that can be directly identified with the production of a product or the rendering of a service.
Fixed
Indirect
Variable
Direct
Those costs that do not vary with the level of output, they remain constant.
All of the following are types of indirect costs EXCEPT:
Indirect Labour
Direct Materials
Indirect Expenses
Indirect Materials
There are two main approaches to costing.
True
False
This is a type of costing system which charges variable costs to the production of the product. What is the name of this type of costing?
(a)
This is a type of costing system which charges fixed and variable costs to the production of the product. What is the name of this type of costing?
(a)
The point at which revenue and costs are equal is known as the:
Contribution point
Fixed point
Break-even point
Variable point
Which of the following can be classified as indirect material?
Cleaner's wages
Factory insurance
Rent and rates
lubricant
The amount by which sales exceed the break-even point is known as the:
Break-even point
Contribution
Margin of safety
Sales
