The production budget is typically prepared prior to the sales budget. Answer Tr

Question

The production budget is typically prepared prior to the sales budget.
Answer True
False
2 points

Question 2

One difficulty with self-imposed budgets is that they are not subject to any type of review.
Answer True
False
2 points

Question 3

Sales forecasts are drawn up after the cash budget has been completed because only then are the funds available for marketing known.
Answer True
False
2 points

Question 4

In the selling and administrative budget, the non-cash charges (such as depreciation) are added to the total budgeted selling and administrative expenses to determine the expected cash disbursements for selling and administrative expenses.
Answer True
False
2 points

Question 5

Both variable and fixed manufacturing overhead costs are included in the manufacturing overhead budget.

Answer True
False
2 points

Question 6

A flexible budget can be used to determine what costs should have been at a given level of activity.

Answer True
False
2 points

Question 7

The revenue and spending variances are the differences between the static planning budget and the actual results for the period.

Answer True
False
2 points

Question 8

Flexible budgets cannot be used when there is more than one cost driver (i.e., measure of activity).

Answer True
False
2 points

Question 9

Generally speaking, it is the responsibility of the production department to see that material usage is kept in line with standards.

Answer True
False
2 points

Question 10

Ideal standards should be used for forecasting and planning.
Answer True
False
2 points

Question 11

When more hours of labor time are necessary to complete a job than the standard allows, the labor rate variance is unfavorable.

Answer True
False
2 points

Question 12

Standard costs greatly increase the complexity of the bookkeeping process.

Answer True
False
2 points

Question 13

A sunk cost is a cost that has already been incurred and that cannot be avoided regardless of what action is chosen.
Answer True
False
2 points

Question 14

Future costs that do not differ among the alternatives are not relevant in a decision.
Answer True
False
2 points

Question 15

The book value of a machine, as shown on the balance sheet, is relevant in a decision concerning the replacement of that machine by another machine.
Answer True
False

Explanation / Answer

10 is false

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