The capacity utilization ratio for is 85% and efficiency ratio for the month is 120%

The capacity utilization ratio for is 85% and efficiency ratio for the month is 120%

Question 150. : A budget in which a responsibility centre manager must justify each planned activity and its budgeted total cost is called – (A) Traditional budget (B) Zero based budget (C) Master budget (D) Functional budget Answer: (B) Zero based budget

Question 158

Question 151. : To produce one unit of ‘A’, two ingredients, ie., 2 kg of X and 3 kg of Y are required:

What will be the quantity of consumption of ingredients X and Y, if 20,000 units of A are sold – (A) 46,000 kg 69,000 kg respectively (B) 49,000 kg 72,000 kg respectively (C) 40,000 kg 60,000 kg respectively (D) 43,000 kg 63,000 kg respectively Answer: (A) 46,000 kg 69,000 kg respectively

Question 152. : Which one of the following would not form part of master budget – (A) Cash budget (B) Statement of profit and loss (C) Statement of financial position (D) None of the above Answer: (D) None of the above

Question 153. : Which one of the following is not advantage of budgetary control? (A) Maximization of profit through effective planning (B) Planned direct payday lenders in California approach for expenditure (C) Create necessary conditions for setting-up of standard costs (D) Based on quantitative data and represent only an impersonal appraisal to the conduct of business activity Answer: (B) Planned approach for expenditure

20% of the sales are on cash basis and balance on credit basis. The amount to be collected from debtors in the month of February and March will be – (A) Zero and ? 8,000 respectively (B) ? 8,000 ? 16,000 respectively (C) ? 8,000 ? 24,000 respectively (D) ? 16,000 ? 36,000 respectively Answer: (C) ? 8,000 ? 24,000 respectively

Question 155. : For a department, the standard overheads rate is ? 2.50 per hour and the overheads allowances are as follows:

Calculate the normal capacity level on the basis of which the standard overheads rate has been worked out – (A) 8,000 Hours (B) 7,000 Hours (C) 6,000 Hours (D) 9,000 Hours Answer: (A) 8,000 Hours

Question 156. : The budget which usually takes the form of budgeted profit and loss account and balance sheet is known as – (A) Cash budget (B) Master budget (C) Flexible budget (D) Sales budget Answer: (B) Master budget

Question 157. : While preparing cash budget, which of the following items would not be included (A) Interest paid to debenture holders (B) Salaries and wages (C) Bonus shares issued (D) Income-tax paid Answer: (C) Bonus shares issued

Question 160

: Budgeted standard hours of a factory are 15,000. The standard hours for actual production in the month will be – (A) 12,750 (B) 18,000 (C) 15,300 (D) 18,000 Answer: (C) 15,300

Question 159. : A plant produces a product in the quantity of 10,000 units at a cost of ? 3 per unit. If 20,000 units are produced, the cost per unit will be ? 2.50. Selling price per unit is ? 4. The variable cost per unit will be: (A) ? 2 (B) ? 3 (C) ? 4 (D) ? 1 Answer: (A) ? 2

: When demand forecasting is difficult, budget which is prepared: (A) Sales Budget (B) Production Budget (C) Financial Budget (D) Flexible Budget Answer: (D) Flexible Budget

Question 161. : The budget which usually takes the form of profit and loss account and balance sheet is known as: (A) Cash budget (B) Master budget (C) Flexible budget (D) Labour budget Answer: (B) Master budget

Question 162. : A fixed budget is one which: (A) is a plan for capital expenditure in monetary terms (B) is designed to remain unchanged irrespective of the volume of output or turnover attained (C) deals with income and expenditure applicable to a particular function (D) deals with none of these Answer: (B) is designed to remain unchanged irrespective of the volume of output or turnover attained

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