5. Budgeted depreciation expense would not appear on a: A. Selling and administr
ID: 2560692 • Letter: 5
Question
5. Budgeted depreciation expense would not appear on a:
A. Selling and administrative expense budget.
B. Budgeted income statement.
C. Cash budget.
D. All of the answers are correct.
6. A budget prepared at a single volume of activity is referred to as a:
A. Strategic budget.
B. Standard budget.
C. Static budget.
D. Flexible budget.
7. When would a variance be labeled as favorable?
A. When actual costs are less than standard costs
B. When standard costs are equal to actual costs
C. When standard costs are less than actual costs
D. When estimated costs are greater than actual costs
8. A difference between the static budget based on planned volume and a flexible budget prepared at actual volume is called a:
A. Flexible budget variance.
B. Static budget variance.
C. Production activity variance.
D. Volume variance.
9. Which manager is normally held responsible for fixed cost volume variances?
A. Production supervisor
B. Upper level marketing managers
C. Plant manager
D. Purchasing agent
Explanation / Answer
5) Budgeted depreciation expense would not appear on a:
C. Cash budget. This is because cash budget includes cash outflow and inflow items and depreciation is non-cash.
6) A budget prepared at a single volume of activity is referred to as a:
C. Static budget. This is so because, the figures are static at a single level of activity.
7) When would a variance be labeled as favorable?
A. When actual costs are less than standard costs. Standard cost - Actual Cost = Positive Value.
8. A difference between the static budget based on planned volume and a flexible budget prepared at actual volume is called a:
D. Volume variance. This is so because the variance is caused due to difference in volume.
9. Which manager is normally held responsible for fixed cost volume variances?
B. Upper level marketing managers
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