FIN704 - Managerial Accounting Quiz#2 Solution and Discussion

[zaasmi]

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