1. An entity would typically prepare the production budget prior to preparing th

Question

1. An entity would typically prepare the production budget prior to preparing the sales il Work one point for a grand total of 45 points budget. rue False 2. The master budget is a network consisting of many separate budgets that are interdependent to each other. True False 3. The budgeting process reduces the need for tracking actual cost activity and variances. True False Comparing a static planning budget to actual costs is a good way to assess whether variable costs are under control. 4. True False Fixed costs should be included in a flexible budget even though they do not change wh the level of activity changes. 5. True False A spending variance is the difference between the cost in the static planning budget a the actual amount of the cost for the period. 6. True False A static planning budget is suitable for planning but is inappropriate for evaluating well costs are controlled. 7. True False 8. Ideal standards should be used in standard costing not practical standards. True False The standard price per unit for direct materials should reflect the final, delivere the materials, net of any discounts taken. 9. True False

Explanation / Answer

Q1. false (ass sales budget is prepared as an initial stage)

Q3. False (with the budgets in place, next step of management is to keep tracking of variances)

Q5. True.

Q7. True (flexible budgets is required for evaluating as the activities may or may not be same as is mentioned in static Budget)

Q9. False (Actual pricec per material shall be taken net of discount. However, the standard price per unit shall remain same).

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