1The production budget for Skate Line Ltd shows that 500 skateboards are to be produced for the month of October. It takes 2 labour hours to produce each skateboard and labour is paid at $280 per 8 hour day. The budget cost of labour for the month of October is:

$17 500.

$35 000.

$14 000.

$28 000.

2

Which of the following statements regarding the participative style of budgeting is not true?

Department managers do not have ownership of the targets and budgets.

The targets and budgets are prepared after negotiations between senior management and department managers.

Provides department managers with an opportunity to create some room to move.

Often results in targets that are easier to achieve.

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3The master budget is commonly classified into which two sections?

Sales and cash budgets.

Operating and financial budgets.

Sales and manufacturing budgets.

Statement of profit or loss and balance sheet budgets.

4

The components of the financial budgets are:

Budgeted statement of profit or loss, sales or fees budget, cash budget.

Operating budget and production budget.

Budgeted statement of profit or loss, budgeted balance sheet, cash budget, and capital expenditure budget.

Capital expenditure budget and manufacturing budget.