FIN704 - Managerial Accounting Quiz#2 Solution and Discussion


  • Cyberian's Gold

    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.

    • True

    • False

    Cost control technique is only effective when some form of standard can be set.

    • True

    • Flase

    Flexible budget consists on several budgets.

    • True

    • Flase

    Indirect material cost is included in factory overhead cost budget.

    • True

    • Flase

    Cash budget is part of budgeted income statement.

    • True

    • Flase

    Cost control technique is concerned with genuine cost saving even standards are challenged.

    • True

    • Flase

    Production budget can be calculated as follows:
    Sales budgeted + desired ending inventory – opening inventory

    • True

    • Flase

    Under estimation of revenues and costs is budget padding.

    • True

    • Flase

    Direct material budget, direct labor budget and factory overhead budget are part of budgeted income statement.

    • True

    • Flase

    Direct material budget is part of budgeted income statement.

    • True

    • Flase

    Cash budget is part of budgeted balance sheet.

    • True

    • Flase

    Nature of flexible budget is dynamic.

    • True

    • Flase

    Fixed budget is based on assumption and flexible budget is realistic.

    • True

    • Flase

    Price variance can be calculated as follows as follows:
    (Actual cost incurred - standard cost) x Actual quantity of units purchased

    • True

    • Flase


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