Management Information 2020 ICAEW questions with correct answers

Equation for contribution per unit - Answer Sale price- (variable production costs+variable non-production costs) T or F: Profit = Total contribution - fixed cost - Answer true Total contribution equation - Answer Contribution per unit X units sold The receiving division is charged with the standard variable cost of transfers made and the supplying division is credited with the market value. Describes what pricing system? - Answer Dual pricing system Contribution ratio - Answer (Revenue- Variable Costs)/ Revenue Main aims of budgeting - Answer - Planning for the future - Controlling costs - Co-ordination - Communication - Motivation - Evaluation - Authorisation - Resource Allocation The budget committee co-ordinates - Answer the preparation and administration of budgets