students zone

Chapter 18 - Muliple-choice questions

1. Budgetary control is used in the following types of entity:
   1.   ?    limited companies
   2.   ?    partnerships
   3.   ?    sole proprietorships
   4.   ?    any organisation
2. Budget periods may be for:
   1.   ?    1 year
   2.   ?    1 year
   3.   ?    1 week
   4.   ?    any period
3. Budgets are used for:
   1.   ?    motivation
   2.   ?    planning
   3.   ?    control
   4.   ?    all of these
4. A major drawback of fixed budgets is that they:
   1.   ?    are drawn up for a single level of activity only
   2.   ?    cannot show the differences between budgeted and actual cost
   3.   ?    can never be used for cost control purposes
   4.   ?    are drawn up for short-term use only
5. Flexible budgets should be used where:
   1.   ?    the actual level of activity is likely to fluctuate
   2.   ?    production and sales levels of activity are equal
   3.   ?    costs are classified according to cost behaviour
   4.   ?    variances are likely to be adverse
6. Variance analysis is concerned with investigating differences between:
   1.   ?    variable costs and fixed costs
   2.   ?    variable direct costs and variable indirect costs
   3.   ?    fixed and flexible budgets
   4.   ?    actual performance and planned performance