QUIZ NO.

3
FUNCTIONAL AND ACTIVITY-BASED BUDGETING

NAME: ____________________________________
________________________________________________
_________________________
_____________ SCORE: ___________________ 
___________________ 

The following information has been gathered b y the Budget Director of the Kareton Company, another outfit managed by
the Masugid Company.
Company. The firm manufactures and sells only one product.
product.

Selling !i"e e! #ni$ % &'.(( E)e"$e* #ni$ +,le+ - '((( #ni$+
Di!e"$ l,/0! "0+$ i+ &3.(( e! 10#! 24 ,n 10#! 05 DL 6 2 #ni$ 05 !0*#"$
E)e"$e* FG /eginning % 47((( #ni$+ E)e"$e* FG en*ing % '(((( #ni$+
V,!i,/le 5,"$0!8 e)en+e+ - &337(( Fi)e* 09e!1e,* - &;((
E)e
E)e"$"$e*
e* R,<
R,< =,$
=,$e!
e!i,
i,l+
l+ /eg
/egin
inni
ning
ng - '(
'(((
(( g,ll
g,ll0n
0n++ E)e
E)e"$
"$e*
e* R,<
R,< =,$
=,$e!
e!i,
i,l+
l+ en*
en*in
ing
g % >((
>(((
( g,l
g,ll0
l0n+
n+
2 #ni$ 6 2 ? g,
g ,ll0n+ 05 !,< =,$e!i,l R,< M,$e!i,l+ "0+$ 6 &(& (.2> e! g,ll0n *#!ing
V,!i,/le
V,!i,/le ,*=ini+$!,$i9e ,n* +elling e)en+e+ - &2.(( e! #ni$
F,"$0!8 09e!1e,* i+ ,lie* $0 <0!@-in-!0"e++ 0n $1e /,+i+ 05 *i!e"$ l,/0! 10#!+.

In assisting the company to formulate the budget, you determined the following budget parameters.
1. Budgeted
Budgeted cost cost of raw
raw material
materialss to be
be used in product
production
ion is
is
a. 1!",#$$ b. 1",%"$ c. &,%1$ d. !!,"1$
!. Budget
Budgeteded raw matemateriarials
ls purch
purchase
asess cost
cost is
a. !!,%#$ b. !!,"1$ c. !',()$ d. 1!",#$$
'. Budg
Budgeteted
ed dir
direc
ectt labo
laborr is
a. !$,(#$ b. &',$$$ c. )!,!#$ d. '',!$$
". *ariabl
ariablee o+erhead
o+erhead cost per directdirect labor
labor hour
hour is
a. 1.)$ b. ".&$ c. 1.&$ d. )."$
#. i-ed
i-ed o+erh
o+erhead ead cos
costt per direc
directt labor
labor hour
hour is
a. 1.)$ b. ".&$ c. 1.&$ d. )."$
). Budget
Budgeted ed cont
contrib
ributi
ution
on marg
marginin is
is
a. #.$$ b. 1.&$ c. '."$ d. !.#&
(. Budget
Budgeteded cost
cost of good
goodss sold
sold full
full cost/
cost/ is
is
a. (),#$$ b. %),#$$ c. 1%),#$$ d. '$",$$$
&. 0et
0et pro
profi
fitt bef
befor
oree ta-
ta- is
a. 1(&,#$$ b. 1$',#$$ c. #',$$$ d. !"%,#$$

%. The following information was e-tracted from the May Cash Budget of air 2tars, a groom pad for men and women3
Budget of air 2tars, a groom pad for men and women3
4-cess of cash a+ailable o+er disbursements  &$$
Cash balance, May 1 1$,1$$
Total cash disbursement for May '!,#$$
The business can only borrow money in round figures of 1,$$$ amounts. If the business is re5uired to maintain a minimum
cash balance of 1$,$$$, how much money should be borrowed in May6

a. %,!$$ b. 1$,$$$ c. !!,$$$ d. !',$$$

1$. era Inc. prepared the following sales budget

Month Cash 2ales Credit 2ales
ebruary  &$,$$$  '"$,$$$
March 1$$,$$$ "$$,$$$
7pril %$,$$$ '($,$$$
May 1!$,$$$ ")$,$$$
8une 11$,$$$ '&$,$$$
Collections are "$9 in the month of sale, "#9 in the month following the sale, and 1$9 two months following the
sale. The remaining #9 is e-pected to be uncollectible.
uncollectible. The company:s
company:s total budgeted collection
collection from 7pril
7pril to 8une
amounts to
a. 1,$%$,!#$ b. 1,'!#,#$$ c. 1,")&,#$$ d. 1,'%(,#$$