Which of the following statements about programme planning and budgeting is correct?
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1 .Which of the following describes a flexed budget?
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2 .The finance function of Bagnall Co has been asked to oversee the production of thecompany’s budgets for the forthcoming year. In their initial instructions to the company’svarious divisions the finance function has stressed that once budgets for next year have beenformally agreed steps will be taken to maintain their ongoing relevance by undertaking amonthly review of budgets for forthcoming months in the light of performance in earliermonths.Which of the following best describes this approach to budgeting?
A Flexible budgeting B Incremental budgeting C Zero-based budgeting D Rolling budgeting
3 .Which of the following definitions best describes Zero-Based Budgeting?
A A method of budgeting where an attempt is made to make each cost heading asclose to zero as possible. B A method of budgeting whereby all activities are re-evaluated each time a budget isformulated. C A method of budgeting which recognises the difference between the behaviour offixed and variable ...
4 .The following statements have been made about a flexed budget:(1) It allows managers to plan for alternative contingencies(2) It makes no differentiation between fixed and variable costs(3) It assists in identifying limiting factors(4) It provides useful control informationWhich of the above statements are correct?
A 1, 2 and 3 only B 1, 3 and 4 only C 1, 2 and 4 only D 2, 3 and 4 only
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7 .The following statements have been made about different types of budgets:Statement 1An annual budget that can be broken down into monthly budgets, which differ depending onthe number of working days in each month, is called a flexible budget.Statement 2An annual budget set before the start of a year based on estimated sales and productionvolumes is called a fixed budget.Which of the above statements is/are true?
A Statement 1 True;Statement 2 False B Statement 1 False;Statement 2 True C Statement 1 False;Statement 2 False D Statement 1 True;Statement 2 True
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