Paper 1+2 Divider 13

Question 1

Budget

Answer 1

A financial plan for the future

Question 2

Budget adv

Answer 2

Can set accurate future budgets

Question 3

Budget disad

Answer 3

Can stop a business from quickly responding to market conditions

Question 4

Variance analysis

Answer 4

Identifying and explaining variances and finding out the causes

Question 5

Adverse analysis

Answer 5

Leads to decreased profit if revenue is lower than expected

Question 6

Favourable analysis

Answer 6

Increased profit because revenue is higher than expected

Question 7

Break even adv

Answer 7

Easy only requires a calculation/graph

Question 8

Break even disad

Answer 8

Isn’t suitable for wide product range businesses

Question 9

Break even

Answer 9

The level of sales from a business

Occurs when contribution=fixed costs

Question 10

Contribution per unit

Answer 10

Looks at all profits made on individual units

Selling price per unit - VC per unit

Question 11

Total contribution

Answer 11

The difference between TR and TVc

Question 12

Margin of safety

Answer 12

The difference between actual output and break even output

Question 13

Gross profit

Answer 13

Profit made after subtracting all the costs related to manufacturing and selling its products or services

Question 14

Operating profit

Answer 14

A measure of the profit eared from a company’s on going core business operations, excluding deductions of interest and taxes

Question 15

Profit of the year

Answer 15

When revenue exceeds the expenses, costs and taxes

Question 16

Payables

Answer 16

Bills to be paid as part of the normal course of business

Question 17

Receivables

Answer 17

Debs owed to a company by its customers for goods or services that have been delivered or used but not paid for