FIN704 - Managerial Accounting Quiz#2 Solution and Discussion
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Units to be produced for the month of April would be Rs. 19,000 if opening inventory, closing inventory and budgeted sales were 4,000 units, 3,500 units and 20,000 units respectively.
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True
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False
Cost control technique is only effective when some form of standard can be set.
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True
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Flase
Flexible budget consists on several budgets.
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True
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Flase
Indirect material cost is included in factory overhead cost budget.
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True
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Flase
Cash budget is part of budgeted income statement.
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True
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Flase
Cost control technique is concerned with genuine cost saving even standards are challenged.
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True
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Flase
Production budget can be calculated as follows:
Sales budgeted + desired ending inventory – opening inventory-
True
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Flase
Under estimation of revenues and costs is budget padding.
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True
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Flase
Direct material budget, direct labor budget and factory overhead budget are part of budgeted income statement.
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True
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Flase
Direct material budget is part of budgeted income statement.
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True
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Flase
Cash budget is part of budgeted balance sheet.
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True
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Flase
Nature of flexible budget is dynamic.
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True
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Flase
Fixed budget is based on assumption and flexible budget is realistic.
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True
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Flase
Price variance can be calculated as follows as follows:
(Actual cost incurred - standard cost) x Actual quantity of units purchased-
True
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Flase
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