Page 286 - P1 Integrated Workbook STUDENT 2018

Subject P1: Management Accounting

4.8 Which of the following statements is incorrect?

A Zero based budgeting can be used on a rolling basis so that not every cost
needs to be justified for every budget period

B In high tech, unpredictable environments, standard costing becomes less
useful than in traditional environments

C In departments which have promoted a new manager from within, a
participative style of budgeting should not be used

D Activity based budgeting is inappropriate in organisations which do not
intend to apportion costs to each activity

4.9 Which of the following is an example of sensitivity analysis in budgeting?

A Changing the expected material cost per unit in order to examine the
impact on profits

B Changing from a zero-based to an activity-based budgeting system

C Changing from an imposed to a participative style of budgeting to
determine the impact on staff motivation

D Comparing the performance of two separate business units which operate
under different budgeting assumptions

4.10 Measuring differences between planned outputs and actual outputs is a
characteristic of what type(s) of budgetary control system?

A Feedback control

B Feedforward control

C Both feedback control and feedforward control

D Neither feedback control nor feedforward control

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