1. Efficiency Ratio=

(A) Number of actual working days in a period x 100
         Number of working days in the budget period
(B) Actual hours worked x 100
           Budgeted hours
(C) Standard hours for actual production x 100
                 Actual hours worked
(D) Standard hours for actual production x 100
               Budgeted standard hours


2. Activity Ratio =

 (A) Number of actual working days in a period x 100
        Number of working days in the budget period
(B) Actual hours worked x 100
           Budgeted hours
(C) Standard hours for actual production x 100
            Actual hours worked
(D) Standard hours for actual production x 100
                Budgeted standard hours



3. ……………….is a summary of all function budgets in a Capsule form.

(A) Sales budget 
(B) Master Budget
(C) Performance budget
(D) Cash Budget



4. ……………..determines the priorities of functional budget.

(A) Principal Budget Factor
(B) Limiting Factor
(C) both a & b
(D) none of the above.



5. Cash Budget is a ……………….budget.

(A) Long term
(B) short term 
(C) very long term
(D) very short term



6. The primary difference between a fixed budget and a variable(flexible) budget is that a fixed budget:

(A) Includes only fixed costs, while a variable budget includes only variable costs.
(B) Is concerned only with future acquisitions of fixed assets, while a variable budget is concerned with expenses which vary with sales.
(C) Cannot be changed after the period begins, while a variable budget can be changed after the period begins.
(D) Is a plan for a single level of sales(or other measure of activity), while a variable budget consists of several plans, one for each of several levels of sales (or other measure of activity)



7. Sales budget is a

(A) Functional budget
(B) Master budget
(C) Expenditure budget
(D) none of these



8. In the case of plant, the limiting factor may be:

(A) Insufficient capacity
(B) shortage of experienced salesmen
(C) general shortage of power
(D) shortage of materials



9. The difference between fixed and variable cost has a special significance in the preparation of

(A) Flexible budget
(B) master budget
(C) cash budget
(D) sales budget



10. The budget that is prepared first of all is…………..

(A) Cash budget
(B) master budget
(C) budget for the key factor
(D) sales budget




More MCQs on Cost Accounting