WorksheetsFlexible Budget Quiz
Total questions: 18
Worksheet time: 20mins
What is a flexible budget?
A budget prepared for a single level of activity
A budget that remains constant irrespective of activity levels
A budget that changes with changes in the level of activity
A budget prepared for a long-term period
Which of the following is a key feature of a flexible budget?
Fixed costs remain unchanged
It is based on historical data only
It adjusts for various levels of activity
It eliminates the need for variance analysis
In a flexible budget, which costs vary directly with the level of activity?
Fixed costs
Variable costs
Semi-variable costs
Overhead costs
A flexible budget is most useful for which of the following purposes?
Forecasting fixed expenses
Controlling costs based on actual activity levels
Planning for long-term investments
Allocating fixed resources
What is the first step in preparing a flexible budget?
Identifying fixed costs
Determining the range of activity levels
Analyzing the variance
Calculating the total cost
If production increases, which cost will likely remain unchanged in a flexible budget?
Direct material costs
Fixed factory rent
Direct labor costs
Utilities
Which of the following statements is true about flexible budgets?
They are rigid and cannot be adjusted once prepared
They are only suitable for fixed costs
They help in performance evaluation by comparing budgeted and actual results
They do not require any assumptions about cost behavior
A flexible budget is prepared:
After actual activity levels are known
Only for financial accounting purposes
Without considering variable costs
Without any regard for cost behavior
Which of the following is not a step in flexible budgeting?
Determining fixed and variable costs
Identifying the relevant activity range
Preparing a standard cost card
Calculating variances in advance
The fixed cost for a factory is ₹10,000, and the variable cost per unit is ₹15. If the production level is 1,000 units, what is the total cost in the flexible budget?
₹15,000
₹25,000
₹10,000
₹20,000
A company incurs a fixed cost of ₹5,000 per month and a variable cost of ₹20 per unit produced. If the production level is increased from 500 units to 800 units, what will be the increase in total cost?
₹6,000
₹10,000
₹3,000
₹15,000
A flexible budget estimates that variable costs are ₹12 per unit and fixed costs are ₹8,000. For an output level of 2,000 units, what is the total cost?
₹24,000
₹32,000
₹16,000
₹8,000
A company prepares a flexible budget for its production process. The total cost at 80% capacity utilization (4,000 units) is ₹2,40,000. At 100% capacity utilization (5,000 units), the total cost is ₹2,90,000. What is the total cost at 60% capacity utilization (3,000 units)?
₹1,90,000
₹1,80,000
₹2,00,000
₹1,70,000
A company’s flexible budget shows the following: Fixed costs: ₹1,00,000 Variable costs: ₹20 per unit If the company operates at 70% capacity and produces 7,000 units, what is the average cost per unit?
₹30
₹35
₹25
₹40
A company has fixed costs of ₹75,000 and a variable cost of ₹25 per unit. If the company produces and sells 2,000 units at a selling price of ₹50 per unit, what is the profit?
₹25,000
₹50,000
₹1,00,000
₹75,000
A company’s flexible budget shows the following: Fixed costs: ₹50,000 Variable cost per unit: ₹20 Selling price per unit: ₹40 If the company produces and sells 1,500 units, what is the profit?
₹10,000
₹15,000
₹20,000
₹25,000
A company’s flexible budget reveals the following information: Fixed costs: ₹1,00,000 Variable cost per unit: ₹25 Total production: 4,000 units If the company wants to achieve a profit of ₹50,000, what should be the selling price per unit?
₹40
₹45
₹50
₹35
Prepare Flexible Budget Format.
