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B Com Exam  >  B Com Tests  >  Cost Management  >  Test: Functional Budgets - B Com MCQ

Test: Functional Budgets - B Com MCQ


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10 Questions MCQ Test Cost Management - Test: Functional Budgets

Test: Functional Budgets for B Com 2024 is part of Cost Management preparation. The Test: Functional Budgets questions and answers have been prepared according to the B Com exam syllabus.The Test: Functional Budgets MCQs are made for B Com 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Functional Budgets below.
Solutions of Test: Functional Budgets questions in English are available as part of our Cost Management for B Com & Test: Functional Budgets solutions in Hindi for Cost Management course. Download more important topics, notes, lectures and mock test series for B Com Exam by signing up for free. Attempt Test: Functional Budgets | 10 questions in 10 minutes | Mock test for B Com preparation | Free important questions MCQ to study Cost Management for B Com Exam | Download free PDF with solutions
Test: Functional Budgets - Question 1
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What is the primary purpose of a functional budget in a business?

Detailed Solution for Test: Functional Budgets - Question 1
Functional budgets are primarily used to control spending and manage the growth of a business by focusing on short-term expenditures within a specific department or function. While they provide valuable financial information, their main goal is to ensure that spending within a particular area is managed effectively.
Test: Functional Budgets - Question 2
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Which department or function is typically responsible for preparing the sales budget?

Detailed Solution for Test: Functional Budgets - Question 2
The sales department is typically responsible for preparing the sales budget. This budget forecasts the quantities and values of sales to be achieved in a budget period and serves as the starting point for other budgets in the organization.
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Test: Functional Budgets - Question 3
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What does the production budget include?

Detailed Solution for Test: Functional Budgets - Question 3
The production budget includes the total output of the organization broken down into estimates of output for each type of product, along with a scheduling of operations to be performed. It also includes a forecast of the closing finished stock to be maintained.
Test: Functional Budgets - Question 4
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What is the purpose of the cost of production budget?
Detailed Solution for Test: Functional Budgets - Question 4
The cost of production budget is prepared to estimate the total cost of production planned for a budget period. It includes not only raw materials and labor costs but also overhead expenses.
Test: Functional Budgets - Question 5
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Who is responsible for preparing the labor and personnel budget?
Detailed Solution for Test: Functional Budgets - Question 5
The Works Manager is responsible for preparing the labor and personnel budget, which includes estimates of the direct labor required to meet production targets and other personnel-related details.
Test: Functional Budgets - Question 6
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What does the administration expenses budget cover?
Detailed Solution for Test: Functional Budgets - Question 6
The administration expenses budget covers expenses incurred in framing policies, directing the organization, and controlling business operations. It includes expenses related to the central office and management salaries.
Test: Functional Budgets - Question 7
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What is the purpose of the capital expenditure budget?
Detailed Solution for Test: Functional Budgets - Question 7
The capital expenditure budget is prepared to estimate the amount of capital needed for acquiring fixed assets required to fulfill production requirements. It focuses on the acquisition of assets like plant and equipment.
Test: Functional Budgets - Question 8
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How is the cash budget divided, and what does it estimate?
Detailed Solution for Test: Functional Budgets - Question 8
The cash budget is divided into two parts: one estimating cash receipts (e.g., cash sales, credit collections) and the other estimating cash payments (e.g., purchases, wages, expenses). It also provides for a minimum cash balance to ensure liquidity.
Test: Functional Budgets - Question 9
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Why are research and development budgets typically established on a long-term basis?
Detailed Solution for Test: Functional Budgets - Question 9
Research and development budgets are typically established on a long-term basis (e.g., 5 to 10 years) because research and development projects can span multiple years and require continuous investment. They focus on long-term innovation and development efforts.
Test: Functional Budgets - Question 10
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What is the main purpose of a functional budget in a business organization?
Detailed Solution for Test: Functional Budgets - Question 10
The main purpose of a functional budget in a business organization is to control short-term expenditures within specific departments or functions. It helps ensure efficient management of resources and spending within those areas.
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Important Questions for Functional Budgets

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Functional Budgets MCQs with Answers

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