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1. Which of the following are purposes of Budgeting(Select all that apply)?
A. Identifying operational mistakes
B. Planning for the future
D. Performance evaluation
All of the above
2. Jonas is the manager of the Finance department at SA PLC. He has been invited to meet with the Board of Directors to decide on the budget for the upcoming period for the Finance department. What is the method of budgeting practiced at SA PLC?
Top Down Budgeting
Bottom up budgeting
3. A company has set a budget for its only product;
Sales 5000 units
Production 4000 units
Skilled Labour @$7 per hour for 2 hours per unit
Unskilled Labour $5 per hour for 1 hour per unit
What would be the budgeted cost for unskilled labour for the period?
4. RH PLC is producing its production budget for the upcoming period.
Forecast Sales 5000 units
Current Inventory of Finished Goods 600 units
Required Closing inventory of FG 500 units
Each unit of the product uses 3KG of raw material and the due to the perishability concerns no inventory of raw materials is maintained. What is the amount of raw material required for production for the upcoming period?
5. A company makes a single product. The following information is available in relation to it;
Budgeted Production 5000 units
Machine Hours per unit 4
Variable overheads are $0.35 per unit and Fixed Overheads are recovered at $0.40 per machine hour.
What is the overhead budget?
6. The management accountant at FAT is preparing budgets for the upcoming period. After evaluating the previous period’s budgets, he has prepared the new budget by adjusting the figures to account for the current level of inflation. This type of budgeting is called;
Top Down Budget
Bottom Up budget
7. A company has sales of $30,000 and $42,000 for the months of January and February respectively. 15% of sales are made on cash and 85% sales are made on credit. 50% of credit sales are paid in the following month, whilst the rest are paid in 2 months time. How much cash will be received in February?
8. Which of the following will not be included in a Cash budget(select all that apply)?
A. Provisions for Doubtful debts
C. Salary for security guard
D. Payment for cleaning liquid
9. A company has purchases of $100,000 and $122,000 for the months of January and February respectively. 15% of purchases are made on cash and 85% purchases are made on credit. 50% of credit purchases are paid in the following month, whilst the rest are paid in 2 months time. How much cash will be paid in February?
10. The management accountant at MK is preparing budgets for the upcoming period. After evaluating the previous period’s budgets, he has prepared the new budget and submitted to the Board of Directors for approval. This type of budgeting is called;
Top Down Budget
Bottom Up budget
11. The following costs relate to U PLC.
Direct Labour $1000
Direct Expenses $650
The above costs were budgeted for an output level of 200 consulting assignments. However, the actual costs for an output of 240 units was as follows;
Direct Labour $1300
Direct Expenses $900