2.2.4 Budgets

Question 1

What is an income budget?

1

Answer 1

• Target for value of sales to be achieved

Question 2

What is an expenditure budget?

1

Answer 2

• Gives budget holders limit on their department costs

Question 3

What do both income and expenditure budgets provide for the month?
1

Answer 3

• Budgeted profit figure

Question 4

What is a historical budget?

1

Answer 4

• Set using last yrs budget as guide, adjust to current circumstances

Question 5

What is a zero based budget?

1

Answer 5

• Set each budget to zero each yr, expect each holder justify budget figure they can work to

Question 6

What is an adverse variance?

1

Answer 6

• Actual figure worse than budgeted

Question 7

What is a favourable variance?

1

Answer 7

• Actual figure better than budgeted