Question

5.Operating budgets consist of all except: Select one:

a. sales budget

b. pro forma income sheet

c. production budget

d. direct materials budget

e. direct labor budget

6-Major steps in preparing the budget include all except: Select one:

a. break-down of marginal revenue and expenses

b. prepare a sales forecast

c. determine expected production volume

d. estimate manufacturing costs and operating expenses

e. determine cash flow and other financial effects

7-Cash budget consists typically of all the following except: Select one:

a. cash receipts section

b. cash disbursement section

c. cash surplus or deficit section

d. cash retrieval section

e. financing section

8-The performance report based on analysis of variances should address the following questions except: Select one:

a. is it favorable or unfavorable

b. if unfavorable, is it significant enough for further investigation

c. if it is significant, is it controllable

d. if it is controllable who is responsible for the variance

e. what causes favorable variances

Answer 1

5. Operating budgets consists of all except Pro forma income budget. Option b is the correct answer.

6. Major steps in preparing budget include all except Prepare a sales forecast as it has nothing to do with budgeting. Hence, option b is the correct answer.

7. Cash budget consists of all except cash retrieval section. Thus, option d is the correct answer.   

8. The performance report based on analysis of variances should not address what causes the favourable variance hence, option e is the correct answer.