B1, B2 & B3 Progress Test

Question 1

List the correct sequence for preparing budgets:

Answer 1

Production Budget, Material purchases budget, budgeted income statement, budgeted balance sheet.

Question 2

An unfavorable direct labor efficiency variance could be cause by:

Answer 2

Unfavorable material usage variance. Poor quality materials could mean unfavorable material usage and cause inefficient labor usage.

Question 3

Cost of Equity Capital FORMULA

Answer 3

K = D/P + G
K = Cost of Equity Capital
D = Dividend next period
P = Stock Price
G = Growth %