A $6,266 B $6,888 C $8,586 D $8,688 Answer：D

15.5 Which of these statements is untrue?

A Spreadsheets make the calculation and manipulation of data easier and quicker B Spreadsheets are very useful for word-processing C Budgeting can be done very easily using spreadsheets D Spreadsheets are useful for plotting graphs Answer：B

The following data applies to questions 15.6 to 15.7: A B C D F G 1 Jan Feb Mar Apr May 2 Sales 15,000 13,400 16,100 17,200 15,300 3 Cost of sales 11,090 10,060 12,040 13,000 11,100 4 Gross profit 3,910 3,340 4,060 4,200 4,200 5 Expenses 1,500 1,500 1,500 1,500 1,500 6 Net profit 2,410 1,840 2,560 2,700 2,700 7 8 Net profit % 15.6 The formula =C2-C3 will give contents of which cell? A C6 B C4 C C5 D C1 Answer：B

15.7 What would be the formula for March net profit? A =D2-D3 B =B6+C6 C =D4-D5 D =D3*D8 Answer：C

15.8 What will be the formula to go in G8? A =G6/G2*100 B =G4/100*G6 C =G2/G6*100 D =G6/G4*100 Answer：A

15.9 A company manufactures a single product. In a computer spreadsheet the cells F1 to F12

contain the budgeted monthly sales units for the twelve months of next year in sequence, with January sales in cell F1 and finishing with December sales in F12. The company policy is for the closing inventory of finished goods each month to be 10% of the budgeted sales units for the following month.

Which of the following formulae will generate the budgeted production (in units) for March

next year?

A =[F3+(0.1*F4)]

B =[F3-(0.1*F4)]

C =[(1.1*F3)-(0.1*F4)] D =[(0.9*F3)+(0.1*F4)] Answer：D

15.10 Which of the following are disadvantages of flexible budgets? 1 They are not very useful for decision-making

2 They are more time consuming to prepare than fixed budgets

3 They fail to provide an appropriate yardstick for cost control purposes 4 They are based on a set of assumptions which may be over simplistic A 2 and 4 only B 2,3 and 4 only C 1,2 and 3 only D 1,3 and 4 only Answer：A

16 The budgetary process

16.1 A master budget comprises

A the budgeted income statement

B the budgeted cash flow, budgeted income statement and budgeted statement of

financial position

C the budgeted cash flow

D the entire set of budgets prepared Answer：B

16.2 Which of the following is not a functional budget?

A Production budget

B Distribution cost budget C Selling cost budget D Cash budget Answer：D

16.3 If a company has no production resource limitations, in which order would the following

budgets be prepared?

1 Material usage budget 4 Finished goods inventory budget 2 Sales budget 5 Production budget

3 Material purchase budget 6 Material inventory budget A 5,4,1,6,3,2 B 2,4,5,1,6,3 C 2,4,5,1,3,6 D 2,5,4,1,6,3 Answer：B

16.4 In a situation where are no production recource limitations, which of the following items of

information must be available for the production budget to be completed?

1 Sales volume from the sales budget

2 Material purchases from the purchases budget 3 Budgeted change in finished goods inventory 4 Standard direct labour cost per unit A 1,2 and 3 B 1,3 and 4 C 1 and 3

D All of them Answer：C

16.5 When preparing a production budget, the quantity to be producted equals

A sale quantity + opening inventory of finished goods + closing inventory of finished

goods

B sale quantity - opening inventory of finished goods + closing inventory of finished

goods

C sale quantity - opening inventory of finished goods - closing inventory of finished

goods

D sale quantity + opening inventory of finished goods - closing inventory of finished

goods

Answer：B

16.6 The quantity of material in the material purchases budget is greater than the inferred from

quantity of material in the material usage budget. Which of the following statements can be this situation?

A Wastage of material occurs in the production process B Finished goods inventories are bedgeted to increase C Raw materials inventories are budgeted to increase D Raw materials inventories are budgeted to decrease Answer：C

16.7 A company plans to sell 24,000 units of product R next year. Opening inventory of R is

expected to be 2,000 units and PQ Co plans to increase inventory by 25 per cent by the year. How many units of product R should be produced next year?

A 23,500 units B 24,000 units C 24,500 units D 30,000 units Answer：C

16.8 Each unit of product Alpha requires 3 kg of raw material. Next month?s production budget for

product Alpha is as follows.

Opening inventories:

Raw materials 15,000 kg Finished units of Alpha 2,000 units Budgeted sales of Alpha 60,000 units Planned closing inventories:

Raw materials 7,000 kg Finished units of Alpha 3,000 units

The number of kilograms of raw materials that should be purchases next month is: A 172,000 B 175,000 C 183,000 D 191,000 Answer：B

16.9 Budgeted sales of X for December are 18,000 units. At the end of the production process for

X, 10% of production units are scrapped as defective. Opening inventories of X for December are budget to be 15,000 units and closing inventories will be 11,400 units.All inventories of finished goods must have successfully passed the quality control check. The production

budget for X for December, in units is

A 12,960 B 14,400 C 15,840 D 16,000 Answer：D

16.10 A company manufactures a single product, M. Budgeted production output of product M

during August is 200 units. Each unit of product M requires 6 labour hours for completion and PR Co anticipates 20 per cent idle time. Labour is paid at a rate of $7 per hour. The direct labour cost budget for August is

A $6,720 B $10,080 C $8,400 D $10,500 Answer：D

16.11 Each unit of product Echo takes five direct labour hours to make. Quality standards are high,

and 8% of units are rejected after completion as sub-standard. Next month?s budget are as follows.

Opening inventories of finished goods 3,000 units Planned closing inventories of finished goods 7,600 units Budgeted sales of Echo 36,800 units

All inventories of finished goods must have successfully passed the quality control check. What is the direct labour hours budget for the month? A 190,440 hours B 207,000 hours C 223,560 hours D 225,000 hours Answer：D

16.12 Budgeted production in a factory for next period is 4,800 units. Each unit requires five

labour hours to make. Labour is paid $10 per hour. Idle time represents 20% of the total labour time.

What is the budgeted total labour cost for the next period? A $192,000 C $288,000 B $240,000 D $300,000 Answer：D

16.13 Which of the following statements are true?

1 A flexible budget allows businesses to evaluate a manager?s performance more fairly 2 A fixed budget is useful for defining the broad objectives of the organisation 3 Relying on fixed budgets alone would usually give rise to massive variances A 1 and 3 only B 1 and 2 only C 2 and 3 only D 1,2 and 3 Answer：D

16.14 Which of the following statements are true?

1 Flexed budgets help managers to deal with uncertainty

2 Flexed budgets allow a more meaningful comparison to the made with actual results A 1 is ture and 2 is fales B 2 is ture and 1 is fales