Costing - Study Mode

[#406] In ratio analysis, 'proforma analysis' implies
Correct Answer

(D) comparison of the firm's past and current ratios with future ratios to ascertain the relative strengths and weakness in the past and future

[#407] Last step in developing operating budget is
Correct Answer

(B) implementing decision

Explanation

Solution: Last step in developing operating budget is implementing decision. An operating budget is a forecast of the revenues and expenses expected for one or more future periods.

[#408] In master budgeting, cost drivers for manufacturing overhead costs are
Correct Answer

(D) both a and b

Explanation

Solution: In master budgeting, cost drivers for manufacturing overhead costs are direct manufacturing labour-hours and setup labour-hours.

[#409] Document, which contains information about used material sequence, detail and quantity of raw material is classified as
Correct Answer

(A) bill of materials

Explanation

Solution: Document, which contains information about used material sequence, detail and quantity of raw material is classified as bill of materials. A bill of materials (BOM) is used in the manufacture of a product and should contain raw materials, subassemblies, subcomponents, and parts.

[#410] Type of budget, which is always available for specified period of future is called
Correct Answer

(D) continuous budget

Explanation

Solution: Type of budget, which is always available for specified period of future is called continuous budget. Continuous budgeting is the process of continually adding one more month to the end of a multi-period budget as each month goes by.