Question

10. Which type of pro forma financial statement is used to predict how an organization would utilize assets in the future?

a. pro forma statement of financial position

b. pro forma income statement

c. pro forma cash flow statement

d. projected balance sheet

11. What is the major difference between a static budget and a flexible budget?

a. the number of production levels that are used in the forecast

b. The budget period used to forecast production results

c. The types of revenues and costs associated with the projected production

d. the ability to modify budget figures based on actual production

12. A learning curve...

a. shows the efficiencies gained from experience

b. determines inefficiencies in the production process

c. uses historical data as a basis for forecasting

d. uses statistical techniques for forecasting

13. A contribution margin is the difference between...

a. the total revenues and the total variable costs of a product

b. the total revenues and the total fixed costs of a product

c. the total costs of the organization and the total costs of a product

d. the total revenues of the organization and the total revenues of a product

Answer 1

10) Answer : d. projected balance sheet

=> The projected balance sheet contains the value of the assets and its valid life, which are utilized in future.

11) Answer : d. the ability to modify budget figures based on actual production

=> The flexible budget is the adjustment of the static budget to the actual production.

12) Answer : a. shows the efficiencies gained from experience

=> The learning curve shows the improvement in performance due to labor experience.

13) Answer : a. the total revenues and the total variable costs of a product

=> The contribution margin = revenue – total variable or Fixed costs + profit