Q1. Which one of the following levers of control in budget ensures sufficient cash flow for financial viability?

a)Diagnostic control system

b)Belief system

c)Interactive control system

d)Boundary system

Q2. Which one of the following method of allocating joint costs used when all products sold at split-off?

a)Net realizable value (NRV) method

b)Physical output

c)Constant gross margin (GM) NRV method

d)Sales value at split-off method

Q3. Which one of the following budgeting approach, the budgets identify fixed and variable cost functions at the resource center level?

a)Rolling budgets

b)Zero based budgets

c)GPK and RCA

d)Activity based budgets

Q4. The stage in the joint process where the separate products become identifiable is called as:

a)Net realizable value

b)Constant gross margin

c)Production process

d)Split-off point

Q5. The final sales value of a particular product is $250,000 and separable cost is $110,000. The net realizable value of the product will be:

a)$250,000

b)$140,000

c)$110,000

d)$360,000

Q6. A company has two products, product X and product Y. The pounds produced for X and Y are 18,000 and 12,000 respectively. The joint costs of processing the 30,000 pounds of products were $100,000. Using the physical volume method, the allocation of the joint costs to each product will be:

a)$60,000 for X and $ 40,000 for Y

b)$50,000 for X and $ 50,000 for Y

c)$80,000 for X and $ 20,000 for Y

d)$30,000 for X and $ 70,000 for Y

Short Answer (4 Marks)

Q. ABC Company is preparing a budget for 2010.The budgeted selling price per unit is $25, and total fixed costs for 2010 are estimated to be $12,500.Variable costs are budgeted at $7.5/unit.Prepare a flexible budget for the volume levels 1,500, 1,600, and 1,800 units.

Note: Use the following table to present your answer:

Particulars Volume Levels Sales in Units