FIN704 - Managerial Accounting Quiz#2 Solution and Discussion


  • Cyberian's

    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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