Fichas
Budgets
Fichas del conjunto (12)
- 1What type of costs are direct materials and direct labourVariable
- 2If a fixed budget is created for 12,000 units sold, but only 9,000 units are sold how do we adjust for this in the budget?Flex the budget to reflect the 25% decrease in sales
- 3When flexing a budget by 10% what do we do about the fixed costs?Remain the same
- 4If we have semi variable cost in a budget how do we extract the variable and fixed amounts from the budget figure?use high low method.
- 57000 units cost £67,500 5000 units cost £62,500 Use the high low method to determine the fixed and variable costs.7000 units less 5000 units = 2000 units
£67,500 less £62,500 =£5,000
Variable cost is £5,000/2000 units = £2.50
Total cost minus variable cost = fixed cost
£67,500 - £12,500(vc) = £55,000 fixed cost - 6Alot of budgets show contribution. How is this calculated?Sales minus variable costs
- 7Will an increase in material prices result in an adverse or favourable variance?Adverse
- 8What affect will an increase in selling price have on the variances?Favourable
- 9If the labour variance is adverse, what are two possible reasons why this could be so?The labour used was highly skilled so the cost was greater and machine breakdowns caused the production run to take longer.
- 10How could we improve an adverse labour variance?train staff to work more efficiently
use labour at a lower grade of pay
reorganise the production process so staff work more efficiently - 11What are some of the advantages of using a rolling budget?always a budget that extends into the future
the new budget period is informed by current costing's etc
The focus of management is on one budget period at a time rather than the whole year - 12What are some disadvantages of a rolling budget?Can be costly
Time consuming
Focus may be on updating the budget continually rather than controlling costs.
Información
- Descripción
- AAT Management Accounting level 3 Fichas sobre Budgets, creado por ross Young el 02/02/2026.
- Creado por
- ross Young
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