Question 1

An input of 5000kg of material introduced into the process and the expected loss is 8% and if the actual output from the process is 4300, the abnormal loss is................. kg&#10;A)400&#10;B)300&#10;C)500&#10;D)600

Accepted Answer

The expected loss on 5000kg is 8%, which equals 400kg (5000 * 0.08). Therefore, the expected output should be 5000kg - 400kg = 4600kg. The actual output is 4300kg, so the abnormal loss is 4600kg - 4300kg = 300kg.

Question 2

Budgeting system&#8230;................ key managerial functions. School of Distance Education Cost Accounting Page 20&#10;A)dismisses&#10;B)integrates&#10;C)discharges&#10;D)none of these

Accepted Answer

Budgeting system integrates key managerial functions by aligning financial planning with the organization's strategic goals, facilitating coordination among different departments, and aiding in decision-making processes.

Question 3

&#8230;&#8230;.is a budget which is updated continuously by adding a further period (a month/quarter) and deducting a corresponding earlierperiod.&#10;A)rolling budget&#10;B)continuous budget&#10;C)annual budget&#10;D)both a & b

Accepted Answer

A rolling budget, also known as a continuous budget, is updated continuously by adding a new period (like a month or quarter) and removing an old one, ensuring the budget always extends a constant period into the future. Both terms describe this process.

Question 4

The budget relating to.................... must be prepared first and the other budgets should be prepared in the light of that factor.&#10;A)limiting factor&#10;B)materials&#10;C)labour&#10;D)production

Accepted Answer

The limiting factor budget must be prepared first because it represents the constraint that will limit the company's ability to produce goods or services. All other budgets need to be prepared considering this constraint to ensure that resources are allocated efficiently and the company's operations are optimized within the limitations.

Question 5

&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;budget is the most important budget and it forms the basis on which all the other budgets are built up.&#10;A)production&#10;B)material&#10;C)cash budget&#10;D)sales

Accepted Answer

The sales budget is considered the most important budget because it serves as the foundation for all other budgets within a company. It outlines the expected sales for a future period, and based on these projections, companies can plan their production, material requirements, and cash flows. Essentially, the sales budget drives the planning for all other operational and financial activities, making it fundamental to the budgeting process.

Question 6

&#8230;&#8230;.budget may be classified into material cost budget, labour cost budget and overhead budget.&#10;A)cost of production&#10;B)purchase&#10;C)sales&#10;D)cash

Accepted Answer

The correct answer is "cost of production" because it directly relates to the categorization of budgets into material cost budget, labour cost budget, and overhead budget, all of which are components of the total cost of producing goods or services.

Question 7

&#8230;&#8230;&#8230;budget gives an estimate of the anticipated receipts and payment of cash during the budget period.&#10;A)sales&#10;B)production&#10;C)cash&#10;D)master

Accepted Answer

The cash budget is specifically designed to estimate the anticipated receipts (income) and payments (expenses) of cash during a budget period, helping organizations manage their cash flow effectively.

Question 8

&#8230;&#8230;&#8230;.is the consolidated summary of the various functional budgets.&#10;A)master budget&#10;B)sales budget&#10;C)performance budget&#10;D)cash budget

Accepted Answer

The master budget is a comprehensive financial planning document that consolidates all of the individual functional budgets within an organization, such as sales, production, and cash budgets, into one overarching budget.

Question 9

&#8230;&#8230;&#8230;&#8230;..budget is designed to remain unchanged irrespective of the volume of output or turnover attained.&#10;A)master&#10;B)fixed&#10;C)flexible&#10;D)all of these

Accepted Answer

A fixed budget is designed to remain unchanged irrespective of the volume of output or turnover attained, as it does not adjust for changes in the level of activity or production volume.

Question 10

&#8230;&#8230;&#8230;.budget gives differentbudgeted costs for different levels of activity.&#10;A)master&#10;B)fixed&#10;C)flexible&#10;D)all of these

Accepted Answer

A flexible budget adjusts for different levels of activity, allowing for a more accurate comparison of actual costs to budgeted costs across different levels of output or sales.

Question 11

&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;budget is the preparation of budget starting from a clean state.&#10;A)performance&#10;B)zero base&#10;C)cash&#10;D)none of these

Accepted Answer

The answer of &#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;budget is the preparation of budget starting...

Question 12

&#8230;&#8230;&#8230;&#8230;is a summary of all function budgets in a Capsule form.&#10;A)master budget&#10;B)sales budget&#10;C)performance budget&#10;D)cash budget

Accepted Answer

The answer of &#8230;&#8230;&#8230;&#8230;is a summary of all function budgets...

Deck 6: Budgeting and Loss Calculation in Cost Accounting