Cima C01 Exam Question No 18

Question No 18:

A flexible budget is?

A. A budget which by recognizing different cost behavior patterns is designed to change as the volume of activity changes.
B. A budget for a defined period of time which includes planned revenues, expenses, assets, liabilities and cash flow.
C. A budget which is prepared for a period of one year which is reviewed monthly, whereby each time actual results are reported, a further forecast period is added and the intermediate period forecasts are updated.
D. A budget of semi-variable production costs only.

Answer: A

Cima C01 Exam Question No 17

Question No 17:

What is the divisionalisation and controlling people
Centralization - Advantages?
The following details have been extracted from the receivables records of X:
Invoices paid in the month after sale             60%
Invoices paid in the second month after sale        20%
Invoices paid in the third month after sale         15%
Bad debts                         5%
Credit sales for June to August 2011 are budgeted as follows:
June                             $100,000
July                             $150,000
August                             $130,000
Customers paying in the month after sale are entitled to deduct a 2% settlement discount.
Invoices are issued on the last day of the month.
The amount budgeted to be received in September 2011 from credit sales is:

A. $115,190
B. $116,750
C. $121,440
D. $123,000

Answer: C

Cima C01 Exam Question No 16

Question No 16:

Based on the data below, what is the amount of the overhead under-/over-absorbed?

Budgeted overheads                      $493,200
Budgeted machine hours             10,960 
Actual machine hours                  10,493
Actual overheads                          $514,157

A. $20,957 under-absorbed
B. $21,015 over-absorbed
C. $21,015 under-absorbed
D. $41,972 under-absorbed

Answer: D

Cima C01 Exam Question No 15

Question No 15:

Fixed costs are conventionally deemed to be:

A. Constant per unit of output
B. Constant in total when production volume changes
C. Outside the control of management
D. Those unaffected by inflation

Answer: B

Cima C01 Exam Question No 14

Question No 14:

Which ONE of the following statements is true?

A. The total variable cost varies with a measure of activity.
B. A variable cost is an unavoidable cost.
C. A variable cost is not relevant for decision-making.
D. A variable cost becomes fixed in the long run.

Answer: A