AAT L4 Management Accounting Budgeting

Question 1

A company has budgeted sales of 12,000 units for Q1. Opening inventory is 2,000 units and the desired closing inventory is 3,000 units. How many units must be produced?

Accepted Answer

13,000

Answer

11,000

Answer

12,000

Answer

14,000

Question 2

Which budgeting approach requires every item of expenditure to be justified from scratch each period?

Accepted Answer

Zero-based budgeting

Answer

Incremental budgeting

Answer

Flexed budgeting

Answer

Rolling budgeting

Question 3

A flexed budget adjusts the original budget for:

Accepted Answer

The actual level of activity achieved

Answer

Changes in selling prices

Answer

Inflation only

Answer

Management bonus targets

Question 4

A company budgets fixed overheads of £180,000 and variable overheads of £6 per unit. Budgeted output is 20,000 units but actual output is 22,000 units. What is the flexed budget for total overheads?

Accepted Answer

£312,000

Answer

£300,000

Answer

£292,000

Answer

£316,000

Question 5

What is the principal budget factor?

Accepted Answer

The factor that limits the organisation's activities in a given period

Answer

The budget with the largest monetary value

Answer

The managing director's budget

Answer

The cost centre with the most employees

Question 6

Participative (bottom-up) budgeting is most likely to result in:

Accepted Answer

Greater staff motivation and ownership of targets

Answer

Budgets that are impossible to achieve

Answer

Shorter budget preparation time

Answer

Less accurate forecasts