problem 1) Answer all the problems:
1) Describe the major characteristics of budgeting.
2) Describe the main objectives of performance budgeting.
3) Describe the difference between budget and business forecasting.
4) prepare a brief note on labour cost variance.
5) What do you mean by key factor? Give exs of some key factors.
problem 2) What do you understand by a business budget? Describe the objectives and nature of a budget.
problem 3) Discuss budgetary control. prepare down the importance and limitation of budgetary control.
problem 4) For the production of 10,000 electric automatic irons, the following are the budgeted expenses:
Per unit Rs
Direct Material 60
Direct Labour 30
Direct Expenses 5
Variable Factory Overhead 25
Fixed Factory Overheads ( Rs. 1,50,000) 15
Selling Expenses (10% fixed) 15
Administration expenses (Rs. 50,000 fixed for all levels of production) 5
Distribution Expenses (20% fixed) 5
TOTAL COST 160
Prepare a budget for the production of 6,000, 7,000 and 8,000 irons showing distinctly the marginal cost and the total cost.