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What are the three main types of budgets?
Income, Expenditure, Profit
How do you calculate a variance?
Revenue - Costs
Actual - Budgeted
Budget + Actual
Budgeted - Actual
What does a favourable variance mean?
Revenue was lower than budgeted
The result was worse than expected
The result was better than expected
The same as expected
Why do businesses set budgets?
To avoid taxes
To control spending
To pay staff
To confuse competitors
What’s one problem with setting budgets?
Inaccurate forecasts
Too many sales
Budget surplus
Too much profit
What is an income budget?
Past financial summary
An estimate of profit
A list of employee wages
A plan for expected revenue
What is an expenditure budget?
A plan for expected income
A plan for expected costs
A list of assets
A plan for expected profit
What is a profit budget?
Expected expenses only
Net cash flow
Expected income minus expected expenditure
Expected revenue only
Which of these is a feature of good budgeting?
Vague
Confusing
Realistic
Over-ambitious
Rent, salaries and materials are examples of what?
Profit
Assets
Income
Expenditure
What should a business do if it sees an adverse variance?
Ignore it
Celebrate
Cut all spending
Investigate the cause
Budgets are usually based on what?
Luck
Forecasts
Guesswork
Past feelings
Which budget might change based on seasonal sales?
Cash budget
Expenditure budget
Income budget
Profit budget
How might tariffs affect Nike’s budgets?
Reduce income
No effect
Increase profit
Increase expenditure
What’s one possible business response to a large adverse variance?
Ignore the variance
Raise all prices immediately
Launch a promotion
Fire all staff
