Management Accounting Term III Test

Which budget is generally called "foundation of all other Budgets"
1. Production
2. Purchase
3. Sales
4. Cash
Production budget is generally based on which Budget ?
1. Production Cost Budget
2. Purchase Budget
3. Sales Budget
4. Flexible Budget
Production Cost Budget is generally consists of three Sub-budgets. One of these Budgets is ?
1. Research Budget
2. Purchase Budget
3. Sales Budget
4. Direct Materials Budget
Production Volume Budget is part of Production Budget and shows the physical units to be manufactured. In the equation below find the "missing?" term.
Units to be produced= Desired closing stock of Fininshed stock + ___?___ - opening stock of finished stock
1. Production Cost
2. Budgeted Purchase
3. Budgeted Sales Units
4. Overhead Expenditure
Master Budget can be prepared only after preparation of :-
1. Production Cost Budget
2. Purchase Budget
3. Cash Budget
4. All the detailed Functional Budgets
Master Budget is also known as :-
1. Sales Budget
2. Purchase Budget
3. Cash Budget
4. Comprehensive Budget
Where the Business is New one and it is difficult to forecast the demand, the company should choose :-
1. Not to make any Budgets
2. Fixed Budgeting
3. Flexible Budgeting
4. Sales Budgeting
Due to variation in Demand, the level of activity in forecast period is not certain.
The company should choose :-
1. Not to make any Budgets
2. Fixed Budgeting
3. Flexible Budgeting
4. Production Budgeting
From following figure available from monthly budget of december 2009, find the Manufacturing Overhead :-
Direct labour cost...................Rs 389
Cost of goods manufactured.....Rs 1878
Direct Material Cost.................Rs 847
1. Rs 3114
2. Rs 642
3. Rs 2062
4. Rs 1420
Following Sales Budget (units) is available:
---------------------------------------------------------------------------------------------
.............................................................. Sales Budget (units)
----------------------------------------------------------------------------------------------
January.......................................................10000 Units
February..................................................... 12000 Units
March..........................................................14000 Units
April.............................................................16000 Units
-----------------------------------------------------------------------------------------------
Inventory of finished goods at the end of every month is to be equal to 25% of sales estimate for the month.
What will be the Production Budget (units) for February ?
1. 10500 units
2. 12500 units
3. 14500 units
4. 16500 units
Following Sales Budget (units) is available:
---------------------------------------------------------------------------------------------
.............................................................. Sales Budget (units)
----------------------------------------------------------------------------------------------
January.......................................................10000 Units
February..................................................... 12000 Units
March..........................................................14000 Units
April.............................................................16000 Units
-----------------------------------------------------------------------------------------------
Inventory of finished goods at the end of every month is to be equal to 20% of sales estimate for the month.
What will be the Production Budget (units) for March ?
1. 10400 units
2. 12400 units
3. 14400 units
4. 16400 units
Following Sales Budget (units) is available:
---------------------------------------------------------------------------------------------
.............................................................. Sales Budget (units)
----------------------------------------------------------------------------------------------
January.......................................................10000 Units
February..................................................... 12000 Units
March..........................................................14000 Units
April.............................................................16000 Units
---------------------------------------------------------------------------------------------
Inventory of finished goods at the end of every month is to be equal to 25% of sales estimate for the month. Every Unit of Product Requires 7kgs of Material.
Material equal to one-half of next month's requirement are in hand at the end of every month.
What will be the Material Purchase (unit) for February ?
1. 87500 units of material
2. 94500 units of material
3. 101500 units of materials
4. 84000 units of materials
Following Sales Budget (units) is available:
---------------------------------------------------------------------------------------------
.............................................................. Sales Budget (units)
----------------------------------------------------------------------------------------------
January.......................................................10000 Units
February..................................................... 12000 Units
March..........................................................14000 Units
April.............................................................16000 Units
---------------------------------------------------------------------------------------------
Inventory of finished goods at the end of every month is to be equal to 20% of sales estimate for the month. Every Unit of Product Requires 5kgs of Material.
Material equal to 100% of next month's requirement are in hand at the end of every month.
What will be the Material Purchase (unit) for February ?
1. 70000 units of material
2. 62000 units of material
3. 72000 units of materials
4. 60000 units of materials
Capital Expenditure Budgeting refers to purchase of durable fixed assets. It is a :-
1. Flexible Budget
2. Cash Budget
3. Short-term Budget
4. Long-term Budget
Taxes and Dividend Paid will appear in which Budget
1. Flexible Budget
2. Long-term Budget
3. Cash Budget
4. Production Cost Budget
Provision for Taxes and Dividend Proposed will appear in which Budget
1. Master Budget
2. Long-term Budget
3. Cash Budget
4. Production Cost Budget
Selling price is Rs 10 per unit. Present sales of Rs 60000 per month utilises only 60% capacity of the plant and generates a profit of Rs 22000. If fixed cost is Rs 20000, what will be the increase in variable cost at 75% level of activity. (Assuming no stocks)
1. Rs 5000
2. Rs 4500
3. Rs 15000
4. Rs 7500
Selling price is Rs 10 per unit. Present sales of Rs 60000 per month utilises only 60% capacity of the plant and generates a profit of Rs 22000. If fixed cost is Rs 20000 and increases by Rs 5000 for every 10% increase in level of activity, what will be the increase in profits at 75% level of activity. (Assuming no stocks)
1. Rs 500
2. Rs 4500
3. Rs 5500
4. Rs 7500
Factory overheads are semi-variable in nature and are Rs 80000 at 40% level of activity and Rs 70000 at 30% level of activity. What will be the factory overheads at 53% level of activity.
1. Rs 53000
2. Rs 83000
3. Rs 93000
4. Rs 80000
Standard hours for actual production
---------------------------------------------------- X 100
Budgeted Hours

is called:-
1. Capacity Ratio
2. Efficiency Ratio
3. Calender Ratio
4. Activity Ratio
Actual hours worked
--------------------------------- X 100
Budgeted Hours

is called:-
1. Capacity Ratio
2. Efficiency Ratio
3. Calender Ratio
4. Activity Ratio
Standard hours for actual production
---------------------------------------------------- X 100
Actual hours worked

is called:-
1. Capacity Ratio
2. Efficiency Ratio
3. Calender Ratio
4. Activity Ratio
Which one of the following is not a benefit of Zero-Base Budgeting
1. ZBB overcomes the deficiencies of incremental Budgeting
2. Past inefficiencies are not repeated
3. Management has an opportunity to get critical appraisal of its activities
4. Costs and benefits in each package must be continually updated to be relevant and new packages are to be developed.
Cash Budget helps in making decisions for:-
1. Payment of wages by cash or cheque
2. Fixed Factory Overheads
3. Deposit of cash in Bank accounts
4. Short-term investment of surplus funds
Budgets are always prepared for :-
1. Last Financial Year
2. Last Calender Month
3. Previous three Months
4. for some specific future period.

Management Accounting Term III Test

Only one option is correct. For wrong answers there will be negative marking.This test is timed. No extra time will be allowed

Only one option is correct. For wrong answers there will be negative marking.

This test is timed. No extra time will be allowed