Management Information questions with
answers.
What is a step cost? ANS -A step cost if a hiring cost remains fixed within certain activity levels it is a
step cost.
A manufacturing firm is very busy and overtime is being worked.
Requirement
The amount of overtime premium paid to production line workers would normally be classed as
A
factory overheads
B
part of prime cost
C
direct labour costs
D
administrative overheads ANS -The correct answer is:
A
factory overheads
Overtime premium payments are always classed as factory overheads unless the overtime is worked at
the specific request of a customer (in order to complete the specific job more quickly) or worked
regularly by a production department in the normal course of operations.
What is beyond budgeting and what are the 6 leadership principles? ANS -Purpose - Engage and inspire
people around bold and noble causes; not around short-term financial targets
Values - Govern through shared values and sound judgement; not through detailed rules and regulations
Transparency - Make information open for self-regulation, innovation, learning and control; don't
restrict it
, Organisation - Cultivate a strong sense of belonging and organise around accountable teams; avoid
hierarchical control and bureaucracy
Autonomy - Trust people with freedom to act; don't punish everyone if someone should abuse it
Customers - Connect everyone's work with customer needs; avoid conflicts of interest
What are the 6 management processes in beyond budgeting? ANS -Rhythm - Organise management
processes dynamically around rhythms and events; not around the calendar year only
Targets - Set directional, ambitious and relative goals; avoid fixed and cascaded targets
Plans and forecasts - Make planning and forecasting lean and unbiased processes; not rigid and political
exercises
Resource allocation - Foster a cost-conscious mind-set and make resources available as needed; not
through detailed annual budget allocations
Performance evaluation - Evaluate performance holistically and with peer feedback for learning and
development; not based on measurement only and not for rewards only
Rewards - Reward shared success against competition; not against fixed performance contracts
What is the difference between a forecast and a budget? ANS -A forecast is a prediction of what is likely
to happen in the future, given a certain set of circumstances. This is different from a budget, which is a
quantified plan of what the organisation intends should happen in the future.
What is the budget committee? ANS -The budget committee is the coordinating body in the preparation
and administration of budgets.
answers.
What is a step cost? ANS -A step cost if a hiring cost remains fixed within certain activity levels it is a
step cost.
A manufacturing firm is very busy and overtime is being worked.
Requirement
The amount of overtime premium paid to production line workers would normally be classed as
A
factory overheads
B
part of prime cost
C
direct labour costs
D
administrative overheads ANS -The correct answer is:
A
factory overheads
Overtime premium payments are always classed as factory overheads unless the overtime is worked at
the specific request of a customer (in order to complete the specific job more quickly) or worked
regularly by a production department in the normal course of operations.
What is beyond budgeting and what are the 6 leadership principles? ANS -Purpose - Engage and inspire
people around bold and noble causes; not around short-term financial targets
Values - Govern through shared values and sound judgement; not through detailed rules and regulations
Transparency - Make information open for self-regulation, innovation, learning and control; don't
restrict it
, Organisation - Cultivate a strong sense of belonging and organise around accountable teams; avoid
hierarchical control and bureaucracy
Autonomy - Trust people with freedom to act; don't punish everyone if someone should abuse it
Customers - Connect everyone's work with customer needs; avoid conflicts of interest
What are the 6 management processes in beyond budgeting? ANS -Rhythm - Organise management
processes dynamically around rhythms and events; not around the calendar year only
Targets - Set directional, ambitious and relative goals; avoid fixed and cascaded targets
Plans and forecasts - Make planning and forecasting lean and unbiased processes; not rigid and political
exercises
Resource allocation - Foster a cost-conscious mind-set and make resources available as needed; not
through detailed annual budget allocations
Performance evaluation - Evaluate performance holistically and with peer feedback for learning and
development; not based on measurement only and not for rewards only
Rewards - Reward shared success against competition; not against fixed performance contracts
What is the difference between a forecast and a budget? ANS -A forecast is a prediction of what is likely
to happen in the future, given a certain set of circumstances. This is different from a budget, which is a
quantified plan of what the organisation intends should happen in the future.
What is the budget committee? ANS -The budget committee is the coordinating body in the preparation
and administration of budgets.
