Page 209 - DMGT403_ACCOUNTING_FOR_MANAGERS

Accounting for Managers

Notes 3. Production budget is under the classification of
(i) By time (ii) By flexibility
(iii) By function (iv) None of the above
4. Why opening stock is deducted in the production budget calculation?
(i) Current year opening stock (ii) Closing stock is added
(iii) It is out of the yester production (iv) None of the above
5. What is a method in determining the cash balance of the respective period?
(i) Opening balance + Cash payments – Cash receipts

(ii) Cash receipts + Cash payments – Opening cash balance
(iii) Opening balance + Cash receipts – Cash payments
(iv) None of the above
6. Which budget is inter related budget with production budget?
(i) Sales budget (ii) Production budget
(iii) Flexible budget (iv) Purchase budget
7. Sale overhead budget is the budget of

(i) Fixed overhead (ii) Variable overhead
(iii) Both (a) & (b) (iv) None of the above
Fill in the blanks:
8. Budget is an estimate prepared for definite ........................ period.
9. The preparation of the production budget is mainly dependent on the ........................ budget.
10. The production volume is connected to the ........................ environment of the firm.
11. ........................ budget takes place only after identifying the number of finished products
expected to produce to the tune of production budget.
12. ........................ Budget is one of the important sub functional budgets, prepared by the sales
manager.

13. Cost control contains two different processes one is the ........................ of the budget and
another one is the ........................ of the prepared budget.
14. ........................ budgeting considers the current year as a new year for the preparation of the
budget but the yester period is not considered for consideration.
15. ........................ overhead is the expense incurred for the promotion of the sales.

9.9 Review Questions

1. From the following figures extracted from the books of KPZ Ltd., Prepare raw materials
procurement budget on cost:
Particulars A B C D E F
Estimated stock on Jan. 1 16,000 6,000 24,000 2,000 14,000 28,000
Estimated stock on Jan. 31 20,000 8,000 28,000 4,000 16,000 32,000
Estimated consumption 1,20,000 44,000 1,32,000 36,000 88,000 1,72,000
Standard price per unit 25 p .10p .50p .30p .40p .50p

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