Fixed costs are Rs. 80,000, the target profit is Rs. 40,000 and CM per unit is Rs. 20. The units required to reach the target profit are:

Target costing computes the target cost as:

A. Actual cost plus markup

B. Target selling price minus desired profit

C. Last year's cost plus inflation

D. Variable cost only

Zero-based budgeting (ZBB) requires that:

A. Last year's budget be increased by inflation

B. Every expenditure be justified from zero in each budget cycle

C. Budgets be zero in the first year

D. No deficit be allowed

Information is considered material if its omission or misstatement could:

A. Change the audit fee

B. Affect only the auditor's working papers

C. Influence the economic decisions of users taken on the basis of the financial statements

D. Be corrected without any disclosure

Excess expenditure over the grant approved by the legislature must be:

A. Ignored

B. Hidden in other accounts

C. Regularized through an excess grant approved by the National Assembly

D. Recovered from the Auditor-General

The business entity concept states that:

A. The owner and business are the same person

B. The business is a separate accounting unit from its owner

C. The business has no obligations

D. Only companies are entities

The four main stages of the budget cycle are:

A. Printing, signing, filing and storing

B. Taxation, borrowing, lending and spending

C. Formulation, legislative approval, execution, and audit and evaluation

D. Planning, hiring, training and retiring

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