Exam 5: Planning Budgeting and Behaviour

In engineered cost centres there is a standard against which actual performance can be measured and variances can be identified and managed accordingly.

Strategic budgeting is best considered in the context of organizational strategy.

Relative performance evaluation relies on direct comparison with budgetary targets.

The process of strategic budgeting may include:

A key metric for the income cycle is the working capital ratio.

A major advantage of zero based budgeting is that is quick and efficient to prepare.

The key independent variable for strategic budgeting is:

What feature differentiates Kaizen budgeting from other forms of budgeting?

Strategic budgeting assists in which of the following?

Excessive reliance on budgets can mean:

Updating rolling budgets with recent results means that changes can be incorporated into budget targets for future periods.

Identifying and justifying linkages between the objectives of the organisation and the cost centre expenditure is a key element of:

The main advantage of using zero based budgeting is that it:

A key element of the cash cycle is the cash flow statement.

It is difficult to measure the relationship between inputs and outputs in discretionary cost centres because the organizational output is not directed related to the activities in the individual cost centre.

Managers which know that next year's budget is likely to be based on their use of this year's allocated funds have incentives to ensure that all of their budgeted funds are used in full each year.

Rolling budgets reflect planning changes and can be prepared monthly or quarterly.

The process of considering the effect of alternative courses of action on profits, assets and cash flow management is known as:

An example of strategic budgeting is:

In considering the outcomes for alternative decisions it is not necessary to include changes in discretionary costs.