Question 41
The investment centre/segment of an organisation is responsible for :
(A) Profits (B) Investments (C) Both (A) and (B) (D) Cost
Answer: (C) Both (A) and (B)
Question 42
Margin of safety is referred to as :
(A) excess of actual sales over fixed expenses (B) excess of actual sales over variable expenses (C) excess of Budgeted or actual sales/revenue over break even sales/revenue (D) excess of budgeted sales over fixed costs
Answer: (C) excess of Budgeted or actual sales/revenue over break even sales/revenue
Question 43
A means of control in which the actual state of affairs is compared with the budget so that appropriate action may be taken with regard to any deviations is known as :
(A) Period Costing (B) Process Costing (C) Budgetary Control (D) None of the above
Answer: (C) Budgetary Control
Question 44
Sales Budget and Production budget are a part of :
(A) Functional Budget (B) Flexible Budget (C) Master Budget (D) Cash Budget
Answer: (A) Functional Budget
Question 45
Budgeting method in which all activities are revaluated each time budget is formulated
(A) Flexible Budgeting (B) Fixed Budgeting (C) Performance Budgeting (D) Zero Base Budgeting
Answer: (D) Zero Base Budgeting
Question 46
The labour cost variance where standard wage rate per hour is Rs.5, Standards time set is 1000 hrs., actual wage rate per hour Rs 6, actual time taken is 980 hrs. is equal to
(A) 850 Adverse (B) 880 Adverse (C) 880 Favourable (D) 850 Favourable
Answer: (B) 880 Adverse Explanation: Labour cost variance = (Standard time × Standard rate) – (Actual time × Actual rate) = (1000 × 5) – (980 × 6) = 5000 – 5880 = -880 (adverse, since actual cost is higher).