Budget Test - 5
Budget Test - 5
Budget Test - 5
i Correct
ii Correct
iii Incorrect, eg budget for number of employees required
iv Incorrect. Master budget also includes budgeted cash flow
v Incorrect. Adjusts variable costs. Fixed are fixed.
A The principal budget factor is the person who is responsible for controlling
and coordinating the budget process
B A business must always produce its sales budget first, before any other
budgets can be decided on.
C The budget committee consists of managers with final responsibility for
agreeing the budget.
3. An organisation is preparing its sales budget for the year ended 31 December 20Y1.
It expects to sell 2000 units of product A per month. The current sale price is $500
per unit and this will increase by 10% in June. Demand for Product B is declining.
First quarter sales are expected to be 4000 units in total and this will drop by 1000
units per quarter for each of the next three quarters. The selling price will be
constant at $300 per unit. Product C will be introduced in September. Sales are
expected to be 500 units per month at a selling price of $100 per unit..
A $15,800,000
B $15,850,000
C $15,900,000
D $16,800,000
BUSINESSCH13ACCAF2MCQZTV1
1
Product A:
2000 units x 5months @ $500 = 5,000,000
2000 units x 7 months @ $550 = 7,700,000
Product B:
(4000+3000+2000+1000) @ $300 = 3,000,000
Product C:
500 units x 4 months @ $100 = 200,000
A 2050
B 2450
C 2500
D 2550
5. The management accountant is preparing the master budget for her retail firm. The
following information has been supplied.
Sales $300,000
Opening stock $40,000
Closing stock $60,000
Mark-up 25%
A $220,000
B $225,000
C $240,000
D $260,000
= $240,000
BUSINESSCH13ACCAF2MCQZTV1
2
= $260,000
6. An extract from next year’s budget for a manufacturing company is shown below.
Month 3 Month 4
A 230,000 kg
B 234,000 kg
C 240,000 kg
D 244,000 kg
What is the total amount of skilled labour hours required in the period?
A 40,000 hours
B 48,000 hours
C 52,000 hours
D 60,000 hours
Alpha Beta
Skilled Hours per unit 2 3
units 8000 12000
Total hours 16000 36000
BUSINESSCH13ACCAF2MCQZTV1
3