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2.2.4 Budgets Flashcards | StudBud
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2.2.4 Budgets
2.2.4 Budgets
15 terms
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StudBud Administration
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137 plays
#Business #theme2 #2.2.4 #variance
Flashcards
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Questions
15
Answers
1
What does historical budgeting mean?
Budget is set at 0 so managers must justify spending.
Budget is based on previous years figures.
Budget is based on company objectives.
2
What does an adverse variance mean?
The business has done better than expected.
The business has done worse than expected.
3
Calculate the variance for expenditure.
450
439
400
4
Actual costs are lower than budgeted. A or F?
Adverse
Favourable
5
Which of the following is not a purpose of budgeting?
Control, monitoring and planning
Communication and co-ordination
Marketing
Efficiency and motivation
6
What does a favourable variance mean?
The business has done worse than expected.
The business has done better than expected.
7
Actual revenue was lower than budgeted. A or F?
Adverse
Favourable
8
What does zero based budgeting mean?
No money is allocate so managers must justify the spending.
Where budgets are decided upon last years spending
Budgets are set based on the companies objectives
9
Which of the following is not a potential issue in creating a budget?
Over planning
Managers lack of knowledge
Time consuming
Inflation
10
What is a budget?
A record of expenditure
A record of income
A plan of income and expenditure
11
What is variance analysis?
Comparing costs in one month to costs in the next.
Setting a budget based on last years figures.
The comparison of actual figures to the budgeted figures.
12
Is the variance for expenditure adverse or favourable?
Favourable
Adverse
13
Which of the following is not a method of setting budgets?
Customer based
Historical
Objective based
Zero based
14
Calculate the variance for sales revenue (find the difference).
700
770
500
15
Is the sales revenue adverse or favourable?
Favourable
Adverse
