Budgeting and budgetary control

Worked examples (10)

• 1What is budgetary control? (4 marks)
• 2Two advantages (4 marks)
• 3Two disadvantages (4 marks)
• 4Budgets and coordination (4 marks)
• 5Budget padding (4 marks)
• 6Short-termism (4 marks)
• 7Rigidity (4 marks)
• 8Participation in budgeting (4 marks)
• 9Advise on budgetary control (5 marks)
• 10'Use it or lose it' (4 marks)

Model answers (10)

• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style

Worked examples (10)

• 1Order the budgets (3 marks)
• 2Sales budget value (3 marks)
• 3Production budget (4 marks)
• 4Materials used (3 marks)
• 5Purchases budget (5 marks)
• 6Labour budget (4 marks)
• 7Building inventory (4 marks)
• 8Running inventory down (4 marks)
• 9Full chain to purchases (6 marks)
• 10Why start with sales (4 marks)

Model answers (10)

• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style

Worked examples (10)

• 1Why time the cash? (3 marks)
• 2Cash received (4 marks)
• 3Cash paid (4 marks)
• 4Timing with a credit period (4 marks)
• 5Allow for discounts (5 marks)
• 6Allow for irrecoverable debts (5 marks)
• 7Find the closing balance (4 marks)
• 8Feed the cash budget (4 marks)
• 9Managing working capital (4 marks)
• 10Receipts spread over months (5 marks)

Model answers (10)

• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style

Worked examples (10)

• 1Fixed vs flexible (3 marks)
• 2Flex the cost (4 marks)
• 3Which costs flex? (3 marks)
• 4Variance vs flexed budget (4 marks)
• 5Why the fixed comparison misleads (4 marks)
• 6Flexible budget statement (6 marks)
• 7Flex the revenue (4 marks)
• 8Flexing a semi-variable cost (5 marks)
• 9Why flexible is better for control (4 marks)
• 10Each budget's role (3 marks)

Model answers (10)

• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style

Worked examples (10)

• 1Components of the master budget (3 marks)
• 2Cash budget: include or not? (4 marks)
• 3Closing cash balance (4 marks)
• 4Carry the balance forward (4 marks)
• 5Identify a cash shortage (4 marks)
• 6Exclude depreciation (3 marks)
• 7Timing receipts and payments (5 marks)
• 8Where each closing balance goes (4 marks)
• 9Profit is not cash (4 marks)
• 10Acting on a forecast shortage (4 marks)

Model answers (10)

• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style

Worked examples (10)

• 1Use the data (4 marks)
• 2Financial or non-financial? (4 marks)
• 3Reject a profitable option (4 marks)
• 4Cash vs profit in a decision (5 marks)
• 5Structure a recommendation (4 marks)
• 6Limitations of the data (4 marks)
• 7Make a clear recommendation (4 marks)
• 8Use variances to decide (4 marks)
• 9Compare two options (5 marks)
• 10Why a two-sided answer (4 marks)

Model answers (10)

• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style