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Budget and Cost Control


  1. What is a budget?
  2. Your assignment is to assist the line organization to prepare the budget.  A number of the line supervisors are new.  What steps will you take to introduce the line supervisors to the process?
  3. Provide us with an example of how "zero-based budgeting" would apply to the staffing in your organization.
  4. What is the difference between a capital budget and an expense budget?
  5. Name some typical operating expenses.
  6. Why is it that the direct salary paid to an employee does not represent the total cost of the employee to the organization?
  7. What experience have you had in developing a budget?
  8. What is the purpose of a budget?
  9. What are the steps involved in preparing a budget?
  10. What is zero-based budgeting?
  11. Have you conducted a budget review?
  12. Define the internal rate of return.
  13. How may the internal rate of return be used in capital budgeting?
  14. What are the benefits of budgeting?
  15. How would you prepare a cost/benefit analysis for an automation system?

Cost Control

  1. What are some of cost-cutting steps you could take to reduce fleet expenses?
  2. Your expenditures for office supplies have increased by 50% over the past two years. What steps will you take to determine the reason for the increase?
  3. What is the relationship between a cost accounting system and a budget?
  4. What benefits does a cost accounting system provide?
  5. You have been asked to recommend some criteria for reducing the budget. What criteria will you recommend for reducing the budget?
  6. You have been asked to reduce the information technology budget. How will you do this?
  7. You have been asked to reduce the training budget. How would you determine the reductions?
  8. Your expenditures for office supplies have increased by 50% over the past two years. What steps will you take to control and reduce expenditures?
  9. Overtime expenditures have increased over the past year. Yet, the workload has not increased. What steps will you take to control overtime?
  10. You have been asked to reduce the staff for your organization by 10%. How will you go about this?
  11. Cost reduction is often associated with budget reductions. What are some positive means of reducing costs?
  12. What are the factors involved in a cost/benefit analysis?
  13. What are the potential pitfalls when the variances of budget versus actual expenditures are expressed only as percentages?



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