Budgetary Control – Corporate and Management Accounting MCQ

Assertion (A):The purpose of performance budgeting is to focus on work to be done and services to be rendered.
Reason (R):The main purpose of performance budgeting is not to inter-relate the physical and financial aspects of every program, project, or activity.

June 2019: Which of the following is not a step for successful implementation of the budgetary control system?

June 2019: The following information extracted from the records of P. Ltd. Sales for October, November and December 2018 is ₹ 90,000, ₹ 1,10,000 and ₹ 80,000 respectively. 40% of its sales are expected to be for cash. Of its credit sales, 70% are expected to pay in the month after-sales and take a 2% discount on it. Balance is expected to pay in second-month after-sales and 3% of it is expected to bad debts.What are the sales receipts to be shown in the cash budget for the month of December?

Dec 2018: Under the Balance Sheet Method of preparing a cash budget, budget is prepared on the basis of :

Dec 2018: ____ is based on the premise that every rupee of expenditure requires justification.

Dec 2018:_____is an operating and financial plan of a business enterprise.

Dec 2018:_____is a budget that, by recognizing different cost behaviour patterns, is designed to change in relation to the volume of output.

June 2018: ABC Ltd. has forecast its sales for the next three months as follows:May : 12,000 units June : 20,000 units July : 25,000 unitsAs per the company policy, the closing stock should be equal to 20% of the coming month’s sales forecast. How many units should be produced in June?

June 2018: A flexible budget is:

June 2018:____ is prepared for the estimation of plant capacity to meet the budgeted production during the budgeted period.

June 2018 & June 2019: The budget which remains unchanged regardless of the actual level of the activity is known as:

In budgeting, there was a shift from financial classification to objective classification in respect of functions, activities etc.

The units to be sold for different months are as follows:Jan Feb Mar April May June 1,200 1,300 1,600 2,000 2,400 3,000There will be no WIP at the end of any month. Finished units equal to half the sales for the next month will be in stock at the end of each month. The required production in units for April will be:

Dec 2017: While preparing a flexible budget indirect wages was considered as semi-variable expenses. At 50% level of production, it was estimated as 1,50,000. If it has a tendency to increase by 10% between 60% to 75% capacity and further will increase by another 5% when production crosses 75%, the amount of indirect wages at 9096 levels of production is:

Dec 2017: A short term budget, broken down into a quarterly or monthly period and reviewed and modified in the light of changing conditions is:

June 2017: When the standard output is 10 units per hour and actual output is 14 units per hour, the efficiency level will be:

June 2017: One of the most significant tools in cost planning is:

June 2017: A fixed budget is one which:

June 2017: The budget which usually takes the form of profit and loss account and balance sheet is known as:

June 2017: When demand forecasting is difficult, the budget which is prepared:

June 2017: A plant produces a product in the quantity of 10,000 units at a cost of ₹ 3 per unit. If 20,000 units are produced, the cost per unit will be ₹ 2.50. The selling price per unit is ₹ 4. The variable cost per unit will be:

Dec 2016: Budgeted standard hours of a factory are 15,000. The capacity utilization ratio for May 2016 is 85% and the efficiency ratio for the month is 120%. The standard hours for actual production in the month will be

While preparing the cash budget, which of the following items would not be included

Dec 2016: The budget which usually takes the form of budgeted profit and loss account and balance sheet is known as

June 2016: For a department, the standard overheads rate is ₹ 2.50 per hour and the overheads allowances are as follows:

June 2016: Kriti Ltd. has provided the following information for the quarter of January to March:20% of the sales are on a cash basis and balance on a credit basis. The amount to be collected from debtors in the month of February and March will be

June 2016: Which one of the following is not an advantage of budgetary control?

June 2016: Which one of the following would not form part of the master budget

June 2016: To produce one unit of ‘A’, two ingredients, Le., 2 kg of X and 3 kg of Y are required:What will be the quantity of consumption of ingredients X and Y, if 20,000 units of A are sold

June 2016: A budget in which a responsibility centre manager must justify each planned activity and its budgeted total cost is called

June 2016: QPR Ltd. has prepared the budget for the production of one lakh units of the only commodity manufactured by them for a costing period as follows:

: X Ltd. has forecast its sales for the next three months as follows:May: 12,000 unitsJune: 20,000 unitsJuly: 25,000 unitsOpening stock as of 1st April is expected to be 5,000 units. The closing stock should equal 20% of the coming month’s sales needs. How many units should be produced in June

: The basic difference between a static budget and a flexible budget is

June 2015: Crown Ltd. has forecast its sales for the next three months as follows:April: 12,000 units, May: 15,000 units, June: 17,000 units.Opening stock as of 1st April is expected to be 3,500 units.The closing stock should be equal to 20% of the coming month’s sales needs. The number of units required to be produced in May is-

June 2015: Estimated wages for January is ₹ 4,000 and for February ₹ 4,400. If the delay in payment of wages is 1 /2 month, the number of wages to be considered in the cash budget for the month of February will be –

June 2015: Budget which remains unchanged regardless of the actual level of activity is known as –

June 2015: A company estimates its quarter wise sales (in units) for the next year as under:The opening stock of finished goods is10,0 units and the company expects to maintain the closing stock of finished goods at 16,250 units at the end of the year. The production pattern in each quarter is based on 80% of the sales of the current quarter and 20% of the sales of the next quarter. The production for quarter IV will be

June 2015: A budget that gives a summary of all the functional budgets and budgeted statement of profit and loss is called

June 2015: A document that sets out the responsibility of the persons engaged in the routine of and the procedures, forms and records required for budgetary control is called

June 2015: A factor that limits the activities of an undertaking and which is taken into account while preparing a budget is known as

June 2015: In Rise Ltd., cash sales is 25% and credit sales 75%. Sales for November, 2014 is ₹ 15,00,000, December, 2014 ₹ 14,00,000, January, 2015 ₹ 16,00,000, February, 2015 ₹ 10,00,000 arid March, 2015 ₹ 9,00,000. 60% of the credit sales are collected in the next month after sales, 30% in the second month and 10% in the third month. No bad debts are anticipated. The cash collected – in the month of March, 2015 from debtors is

Dec 2014: Under which of the following method of budgeting, all activities are re-evaluated each time a budget is set

Dec 2014: In an organization, cash sales are 25% and credit sales are 75%. Sales for October, 2013 is ₹ 12,00,000, November, 2013 ₹ 14,00,000, December, 2013 ₹ 16,00,000, January, 2014 ₹ 6,00,000 and February, 2014 ₹ 8,00,000. 60% of credit sales are collected in the next month after-sales, 30% in the second month and 10% in the third month. No bad debts are anticipated. The cash collected in the month of February 2014 from debtors is

Dec 2014: The following information is available:Wages for January: ₹ 20,000Wages for February: ₹ 22,000Delay in payment of wages: 1 /2 monthThe amount of wages paid during the month of February is

Dec 2014: From the following, which one is a functional budget

Dec 2014: The budgeting system designed to change in relation to the level of activity actually attained is known as