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| 1 | |
For the 2003/2004 financial year, the Department of Education and Training of the Victorian government adopted a form of annual budgeting that entailed: - prioritising education and training programs
- calculating the cost of delivering programs from the bottom-up
- ensuring that resources were used to achieve objectives
- identifying inefficiencies and opportunities for savings
- identifying different options for resources programs
The Department of Education and Training adopted: |
| | A) | bottom-up budgeting |
| | B) | zero-base budgeting |
| | C) | line item budgeting |
| | D) | top-down budgeting |
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| 2 | |
In the 2000s the Federal Government’s Attorney-General’s Department has been using a form of budgeting that gives managers the discretion to manage the resources allocated to particular programs and requires them to meet the financial and non-financial objectives that are set for each program. The focus of this form of budgeting is on outcomes rather than inputs. The Federal Attorney-General’s Department is using: |
| | A) | program budgeting |
| | B) | line item budgeting |
| | C) | top-down budgeting |
| | D) | bottom-up budgeting |
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| 3 | |
Fabulous Flamingos manufactures pink plastic flamingos that are suitable to use as lawn ornaments. The budgeted sales of the flamingos for the next three months are as follows: April | 6 000 | May | 8 000 | June | 9 000 |
Finished goods inventory at the end of March is 2000 flamingos. Budgeted ending finished goods inventory is equal to 20% of next month’s sales. July’s sales are expected to total 10 000. The number of flamingos budgeted to be produced during April is: |
| | A) | 6400 |
| | B) | 6000 |
| | C) | 8000 |
| | D) | 5600 |
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| 4 | |
Fabulous Flamingos manufactures pink plastic flamingos that are suitable to use as lawn ornaments. The budgeted sales of the flamingos for the next three months are as follows: April | 6 000 | May | 8 000 | June | 9 000 |
Finished goods inventory at the end of March is 2000 flamingos. Budgeted ending finished goods inventory is equal to 20% of next month’s sales. July’s sales are expected to total 10 000. The number of flamingos budgeted to be produced during the June quarter is: |
| | A) | 21 000 |
| | B) | 25 000 |
| | C) | 19 000 |
| | D) | 23 000 |
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| 5 | |
Kingsbury Company’s forecast sales for the next year and beginning and ending inventory are as follows: sales, 500 000 units; beginning inventory, 40 000 units; targeted ending inventory, 80 000 units. The selling price is $4 per unit. Each unit requires 4 kilograms of direct materials that costs $0.60 per kilogram. The beginning inventory of raw materials is 12 000 kilograms. Kingsbury wants to have 3000 kilograms of material at the end of the year. The number of units that should be produced is: |
| | A) | 460 000 |
| | B) | 540 000 |
| | C) | 40 000 |
| | D) | 500 000 |
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| 6 | |
Kingsbury Company’s forecast sales for the next year and beginning and ending inventory are as follows: sales, 500 000 units; beginning inventory, 40 000 units; targeted ending inventory, 80 000 units. The selling price is $4 per unit. Each unit requires 4 kilograms of direct materials that costs $0.60 per kilogram. The beginning inventory of raw materials is 12 000 kilograms. Kingsbury wants to have 3000 kilograms of material at the end of the year. The number of kilograms of material that Kingsbury would need to purchase is: |
| | A) | 1 831 000 |
| | B) | 2 691 000 |
| | C) | 1 991 000 |
| | D) | 2 151 000 |
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| 7 | |
Kingsbury Company’s forecast sales for the next year and beginning and ending inventory are as follows: sales, 500 000 units; beginning inventory, 40 000 units; targeted ending inventory, 80 000 units. The selling price is $4 per unit. Each unit requires 4 kilograms of direct materials that costs $0.60 per kilogram. The beginning inventory of raw materials is 12 000 kilograms. Kingsbury wants to have 3000 kilograms of material at the end of the year. Kingsbury’s total purchase cost would be: |
| | A) | $1 290 600 |
| | B) | $1 614 600 |
| | C) | $74 400 |
| | D) | $1 194 600 |
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| 8 | |
Rosanna Industries sells a product for $100. Budgeted sales for the third quarter of the current year are as follows: July, $1 800 000; August, $2 500 000; September, $3 200 000. Rosanna Industries collects 70% in the month of sale and 25% in the following month. Five percent of all sales cannot be collected and are written off as bad debts. Rosanna’s cash receipts for August are: |
| | A) | $1 750 000 |
| | B) | $2 200 000 |
| | C) | $2 240 000 |
| | D) | $1 885 000 |
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| 9 | |
The cash budget ignores all: |
| | A) | trade creditors’ payments |
| | B) | permanent overdraft from the bank |
| | C) | sale of capital assets |
| | D) | non-cash accounting accruals |
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| 10 | |
Mitcham Company has provided you with the following budget information for June: cash collections, $750 000; June 1 cash balance, $25 000; cash disbursements, $895 800. Mitcham Company has a policy of maintaining a minimum cash balance of $20 000 and borrows only in $1 000 increments. In June, Mitcham will have to borrow: |
| | A) | $120 800 |
| | B) | $121 000 |
| | C) | $140 800 |
| | D) | $141 000 |
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