16 - Using Budgets

Question 0

Cost centre

Answer 0

Is a section of a business which incurs expenses.

Question 1

Expenditure budget

Answer 1

Is a plan of the future expenses of a business or cost centre.

Question 2

Profit centre

Answer 2

Is a section of a business which incurs expenses and generates revenue so the profit of it can be calculated and a profit budget set.

Question 3

Delegates budget

Answer 3

Is given to a specific manager to manage and control. The manager can also be involved in helping to determine the size of the budget.

Question 4

Variance

Answer 4

The difference between a budgeted figure and the actual figure achieved.

Question 5

Variance analysis

Answer 5

Is the comparison by an organisation of it’s actual performance with its expected budgeted performance over a certain time period.

Question 6

Favourable variance

Answer 6

The is a change from budgeted figure that leads to higher than expected profits.

Question 7

Adverse variance

Answer 7

This is a change from a budgeted figure that leads to lower than expected profits.