Which one of the following method will be used when measurement for the joined product are to be done in the same way?

a) Sales value at split-off method b) Net realizable value (NRV) method c) Physical output methods

d) Constant gross margin (GM) NRV method

2. In budgets, which one of the following levers of control is related with analysis of variances which helps business to identify their strengths, weaknesses, opportunities and threats analysis?

a) Belief System b) Boundary System c) Interactive control system

d) Diagnostic control system

3. The amount of revenue for a particular product is $225,000. The separable costs and joint costs are $85,000 and $69,000 respectively. The overall gross margin and gross margin ratio will be: a) $81,000 & 36%

b) $90,000 & 40%

c) $65,000 & 28.88%

d) $71,000 & 31.55%

4. In order to meet goals in a convenient manner and receiving appropriate bonuses, managers keep targets at a low level. This would be termed as:

a) Budget ratcheting

b) Budgetary slack

c) Budget cycle

d) Budget variances

5. Under which one of the following method, NRV of the by-products is kept in ending inventory until sold?

a) Recognize by-product value at time of by-product sale

b) Physical output methods

c) Recognize by-product value at time of production

d) Sales value at split-off method

Short Question (2 Marks) The following data is available with respect to ABC Ltd. for 2010: Total Budgeted selling price per Unit $50 Variable cost $10 Fixed Cost $12,000 Prepare a flexible budget for 500 and 600 units. Answer: Volume Levels Sales in units Revenues Variable Cost Contribution Margin Fixed Cost Operating income