Which of the following statements relating to a fixed budget is correct?
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3 .Which of the following would be included in the cash budget? (1) Repayment of loan notes(2) The trade-in value of a car sold in an exchange for a new model (3) Write-off of an irrecoverable debt
A 1 only B 2 only C 1 and 2 only D 3 only
4 .Which of the following describes a flexible budget?
A A budget comprised of variable production costs only B A budget which is updated with actual costs and revenues on a monthly basis C A set of budgets showing costs and revenues at different levels of activity D A budget which is prepared using a computer spreadsheet model
5 .Which of the following is a feature of a fixed budget?
A A budget which ignores inflation B A budget used only for fixed costs C A budget for a single level of activity D A budget for a single product
7 .What is the primary difference between a fixed budget and a flexible budget?
A A fixed budget contains only fixed costs, while a flexible budget also contains variable costs B A fixed budget reflects different activity levels, while a flexible budget is prepared for a single level of activity C A fixed budget is prepared for a single level of activity, while a flexible budge...
8 .Which of the following statements relating to a flexible budget is correct?
A It is prepared when management cannot agree on objectives for the company B It provides budgeted data for various levels of activity C It takes account of the cost behavior of variable costs only D Flexible budgets do not need to be flexed for comparison with actual results
9 .What do the costs in a flexed budget represent?
A Original costs at the fixed budget activity level B Actual costs for the budgeted activity level C Budgeted costs for the actual activity level achieved D Actual costs for actual level of activity level
