This quiz works best with JavaScript enabled. Home > Accounting > Budgeting > Flexible Budgets > Flexible Budgets – Quiz 1 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Flexible Budgets Quiz 1 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. A static budget is: A) A budget for a single level of activity. B) A budget that ignores inflation. C) Used only for fixed costs. D) Used when the mix of products does not change. Show Answer Correct Answer: A) A budget for a single level of activity. 2. A variance ..... an actual amount and the budgeted amount A) Can increase. B) Is the difference between. C) Can decrease. D) None of above. Show Answer Correct Answer: B) Is the difference between. 3. If the price a company paid for overhead items, such as utilities, decreased during the year, the company would probably report a(n): A) Favorable efficiency variance. B) Favorable spending variance. C) Unfavorable efficiency variance. D) Unfavorable spending variance. Show Answer Correct Answer: B) Favorable spending variance. 4. MNL Company wishes to calculate its return on assets. You know that the return on equity is 12% and the debt ratio is 40%. What is the return on assets? A) 4.80%. B) 12.00%. C) 7.20%. D) 20.00%. Show Answer Correct Answer: C) 7.20%. 5. Managers need to know why variance occurred A) To take corrective actions. B) To pinpoint problems. C) Both. D) None of above. Show Answer Correct Answer: C) Both. 6. Analyze the following:Current raio 2.0Acid test ratio 1.5Current liabilities P 120, 000Inventory Turnover 8Gross Margin Percentage 40%The sales for the year were? A) P 240, 000. B) P 480, 000. C) P 800, 000. D) P 1, 200, 000. Show Answer Correct Answer: C) P 800, 000. 7. What is the difference between standard and normal costing? A) Standard costing uses actual hours, normal costing uses standard allowed hours. B) Quantity of hours used. C) No difference. D) None of above. Show Answer Correct Answer: B) Quantity of hours used. 8. LYR, a retail Company, had a cost of goods sold of P 1, 000, 000 last year. the beginning inventory balance was P 90, 000 and the ending inventory balance was P 100, 000. The Company's inventory turnover ratio was closest to A) 9.86. B) 10. C) 10.53. D) 11.11. Show Answer Correct Answer: C) 10.53. 9. A flexible budget A) Summarizes revenues and expenses for only one level of sales volume. B) Summarizes revenues and expenses for various levels of sales volume. C) Summarizes revenues and expenses for the income statement. D) None of above. Show Answer Correct Answer: B) Summarizes revenues and expenses for various levels of sales volume. 10. The master budget A) Is a static budget. B) Is prepared for at least 2 levels of sales volume. C) Is flexible. D) None of above. Show Answer Correct Answer: A) Is a static budget. 11. Budgeting is A) Used to compare actual costs with standards costs. B) Used to determine the cost of manufactured products. C) A detailed plan that translates objectives or goals into financial terms. D) A means of product costing that emphasizes activities as basic cost objects. Show Answer Correct Answer: C) A detailed plan that translates objectives or goals into financial terms. 12. Bucks Company desires and ending inventory of P 62, 000 and a beginning inventory of P 55, 000. Gross Profit is estimated to be 25% of sales. The expected sales amounted to P 320, 000. Budgeted purchases would amount to A) P 230, 000. B) P 240, 000. C) P 247, 000. D) P 370, 000. Show Answer Correct Answer: C) P 247, 000. 13. In a highly decentralized organization, the best option for measuring the performance of subunits is the establishment of A) Cost centers. B) Product Centers. C) Revenue Centers. D) Marketing centers. Show Answer Correct Answer: A) Cost centers. 14. What is the most important purpose of a balanced scorecard? A) To develop strategies. B) To set prices for products. C) To begin the budgeting process. D) To properly measure performances. Show Answer Correct Answer: D) To properly measure performances. 15. Variance is Favorable (F) if A) An actual amount decreases operating income. B) The budget amount is equal to the operating income. C) An actual amount increases operating income. D) None of above. Show Answer Correct Answer: C) An actual amount increases operating income. 16. A company hired workers with less skill than those already working. Which variance would least likely be affected? A) Material use variance. B) Labor rate variance. C) Material price variance. D) Variable overhead efficiency variance. Show Answer Correct Answer: C) Material price variance. 17. Are Production overheads fixed, variable or mixed A) Fixed. B) Variable. C) Mixed. D) None of above. Show Answer Correct Answer: C) Mixed. 18. Managers divide the static budget variance into A) Flexible budget variance and Sales volume variance. B) Master budget variance and Sales volume variance. C) Static budget variance and Sales volume variance. D) None of above. Show Answer Correct Answer: A) Flexible budget variance and Sales volume variance. 19. Sales volume variance occurs because A) Of inflation. B) Sales price/cost per unit and the fixed cost was different than planned. C) Actual number of units sold differs from the amount in the static budget. D) None of above. Show Answer Correct Answer: C) Actual number of units sold differs from the amount in the static budget. 20. Page 583.Are Material Costs fixed, variable or mixed? A) Fixed. B) Variable. C) Mixed. D) None of above. Show Answer Correct Answer: B) Variable. Next →Related QuizzesBudgeting QuizzesAccounting QuizzesFlexible Budgets Quiz 2 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books