WorksheetsBudgetary Control M.O.P.
Total questions: 23
Worksheet time: 23mins
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.
The control process begins when managers set goals.
True
False
When the Marriott decided to improve the quality of service it offered its customers, it asked special corporate guests to comment on the good and bad issues of their stay and also to advise what the competition is doing better than the Marriott. The Marriott used:
information processing
mirroring
data decentralisation
benchmarking
Fixed or variable expense: Rent?
Fixed
Variable
Budget
A budget that is based on several possible levels of sales activity, also known as a variable budget.
A budget that allows an establishment to plan for the replacement of high-cost equipment that wears out, and to purchase new types of equipment that may come on the market.
A budget from one year to five years in the future.
A plan that indicates an operation’s financial objectives or financial standards.
Fixed budget
A budget from one year to five years in the future.
A budget that is based on a certain level of sales revenue; expense estimates for food, labor, and other costs are then calculated based on that level of sales.
A budget planned for a week, a month, or a quarter.
A budget that is based on several possible levels of sales activity, also known as a variable budget.
Forecasting
A formal one-year operating plan to achieve the financial goals of an organization.
Making future predictions about the budget based on current situations and trends.
A method that involves estimating expenses for a future period as a percentage of the sales forecast.
The process of using historical information and knowledge of external factors to predict future sales.
Variance
The minimum amount of sales an establishment must generate to cover all costs.
Making future predictions about the budget based on current situations and trends.
The difference between actual results (i.e., sales) and targeted or budgeted results.
The profit amount that reflects only those line items over which a manager has any influence or control.
