MATS Lesson 7 - Starter

A budget is a financial plan for an organisation that is prepared in advance.

• True

• False

If actual costs are more than budgeted costs , the result is a favourable variance.

• True

• False

Direct materials are budgeted at £103,500 and actual costs are £104,200. Is this variance adverse or favourable?

• Adverse

• Favourable

Sales are budgeted at £103,500 and actual Sales are £104,200. Is this variance adverse or favourable?

• Adverse

• Favourable

A semi-variable cost totals £98,000 when the activity level is 10,000 units and totals £178,000 when activity level is 20,000 units. Using the high/low method work out the variable cost per unit.

• £0.90

• £80,000

• £8.00

• £4.00

A semi-variable cost totals £98,000 when the activity level is 10,000 units and totals £178,000 when activity level is 20,000 units. Using the high/low method work out the fixed cost.

• £20,000

• £80,000

• £10,000

• £18,000

• £40,000

A semi-variable cost totals £26,000 when the activity level is 5,000 units and totals £38,000 when activity level is 9,000 units. Using the high/low method work out the variable cost per unit.

• £3.00

• £2.75

• £3.75

• £12,000

• £11,000

A semi-variable cost totals £26,000 when the activity level is 5,000 units and totals £38,000 when activity level is 9,000 units. Using the high/low method work out the fixed costs.

• £15,000

• £2.20

• £1.22

• £12,000

• £11,000