hitechpathshala

Q. 1

If a company wishes to establish a factory overhead budget system in which estimated costs can be derived directly from estimates of activity levels, it should prepare a:

Master budget

Cash budget

Flexible budget

Fixed budget

Q. 2

The classification of fixed and variable cost is useful for the preparation of:

Master budget

Flexible budget

Cash budget

Capital budget

Q. 3

Budget manual is a document:

Which contains different type of budgets to be formulated only.

Which contains the details about standard cost of the products to be made

Setting out the budget organization and procedures for preparing a budget including fixation of responsibilities, formats and records required for the purpose of preparing a budget and for exercising budgetary control system.

None of the above

Q. 4

The budget control organization is usually headed by a top executive who is known as:

General manager

Budget director/budget controller

Accountant of the organization

None of the above

Q. 5

"A favorable budget variance is always an indication of efficient performance=. Do you agree, give reason?

A favorable variance indicates, saving on the part of the organization hence it indicates efficient performance of the organization.

Under all situations, a favorable variance of an organization speaks about its efficient performance.

A favorable variance does not necessarily indicate efficient performance, because such a variance might have been arrived at by not carrying out the expenses mentioned in the budget.

None of the above.

Q. 6

A budget report is prepared on the principle of exception and thus-

Only unfavorable variances should be shown

Only favorable variance should be shown

Both favorable and unfavorable variances should be shown

None of the above

Q. 7

Purchases budget and materials budget are same:

Purchases budget is a budget which includes only the details of all materials purchased

Purchases budget is a wider concept and thus includes not only purchases of materials but also other item9s as well

Purchases budget is different from materials budget; it includes purchases of other items only

None of the above

Q. 8

Efficiency ratio is:

The extent of actual working days avoided during the budget period

Activity ratio/ capacity ratio

Whether the actual activity is more or less than budgeted activity

None of the above

Q. 9

Activity Ratio depicts:

Whether actual capacity utilized exceeds or falls short of the budgeted capacity

Whether the actual hours used for actual production were more or less than the standard hours

Whether actual activity was more or less than the budgeted capacity

None of the above

Q. 10

Which of the following is usually a short-term budget:

Capital expenditure budget

Research and development budget

Cash budget

Sales budget

Budget & Budgetary Control

Marks: 10