The following statements have been made regarding different types of budget: (i)
A、flexible budget can be used to control operational efficiency. (ii) Incremental budgeting can be defined as a system of budgetary planning and control that measures the additional costs that are incurred when there are unplanned extra units of activity. (iii) Rolling budgets review and, if necessary, revise the budget for the next quarter to ensure that budgets remain relevant for the remainder of the accounting period. Which of the above statement(s) are true?
A、(i) and (ii) only
B、(ii) and (iii) only
C、(iii) only
D、(i) only
A、flexible budget can be used to control operational efficiency. (ii) Incremental budgeting can be defined as a system of budgetary planning and control that measures the additional costs that are incurred when there are unplanned extra units of activity. (iii) Rolling budgets review and, if necessary, revise the budget for the next quarter to ensure that budgets remain relevant for the remainder of the accounting period. Which of the above statement(s) are true?
A、(i) and (ii) only
B、(ii) and (iii) only
C、(iii) only
D、(i) only
【参考答案及解析】
A flexible budget controls operational efficiency by producing a realistic budget cost allowance for the actual level of activity achieved. This allows a more meaningful control comparison with the actual results. Statement (i) is therefore correct. Incremental budgeting uses the current period’s results as a base and adjusts this to allow for any known changes, including the cost increases caused by extra planned units of activity. Statement (ii) is therefore incorrect. In a rolling budget system an extra quarter is added to the end of the budget when the most recent quarter has expired. The remaining budget might be updated at this point. Statement (iii) is therefore incorrect.
A flexible budget controls operational efficiency by producing a realistic budget cost allowance for the actual level of activity achieved. This allows a more meaningful control comparison with the actual results. Statement (i) is therefore correct. Incremental budgeting uses the current period’s results as a base and adjusts this to allow for any known changes, including the cost increases caused by extra planned units of activity. Statement (ii) is therefore incorrect. In a rolling budget system an extra quarter is added to the end of the budget when the most recent quarter has expired. The remaining budget might be updated at this point. Statement (iii) is therefore incorrect.